Mining Update

BHP Billiton Limited (NYSE:BHP) (Melbourne, Australia) is investing $975 million to develop its coal-mining interests in South Africa. At the end of February, the company approved the Douglas-Middelburg optimization (DMO) project. The project will utilize reserves across Douglas and Middelburg Mine Services (MMS) collieries. It will also develop new mining areas and a new 14 million-ton-per-annum (TPA) coal-processing plant.

Douglas Tavistock Joint Venture (DTJV) is the owner of the two collieries in which BHP Billiton holds 84% and Xstrata holds 16%. For the DMO project, the DTJV will be restructured so that the project can be developed and solely owned by BHP. The project will enable BHP to maintain energy coal exports from the combined collieries at around current levels in which BHP has a 9.5 million TPA share.

The first coal from the new mining areas is expected to be produced by the middle of this year, and the new processing plant is expected to receive coal by mid-2010.

Dave Murray, BHP Billiton Coal President, said that approval of the DMO project was a core component of the company's coal strategy in keeping with the focus on operating low-cost, long-life assets. It allowed the company to realize maximum value from these assets by optimizing the existing reserves at Douglas and MMS and enabling the company to maintain exports through 2034.

Marula Merensky Reef Project, South Africa

Marula Merensky Reef Project, Limpopo Province South Africa

A prefeasibility study has been completed on the Merensky reef at the Marula mine. The study, which compared mechanised, hybrid and conventional mining options, was presented to the board in May. A conventional mining method and mine layout were selected.

The Merensky project will incorporate the development of a new decline, concentrator and supporting mining infrastructure. Certain synergies will be achieved with the current surface infrastructure. The project will yield 115 000 oz/y of platinum at a rate of 175 000 t/m mined. The current tailings dam will also be expanded. The life-of-mine of the Merensky operation is expected to be 20 years, although there is potential for this to be extended with the exploitation of deeper areas. On completion of the Merensky project in 2015, Marula will be a 245 000-platinum-ounce operation.

The initial forecasts indicate capital expenditure (capex) in the region of R3-billion. Capex of R500-million has been budgeted for 2008.

The project is expected to start in January 2008 and to be completed in 2015.

Once the full feasibility study has been presented to the board and funding has been approved, work will begin on the mining of the boxcut and on the construction of the surface infrastructure.

Contact details for project information: Impala Platinum, tel +27 11 731 9000 or fax +27 11 731 9254.

Iron-ore Beneficiation Technology Project, South Africa

The project involves a ground-breaking technology that will convert superfine iron-ore into high-quality iron units.

This world-first technology, dubbed Finesmelt, was developed by Iron Mineral Beneficiation Services (IMBS) and produces high-quality iron units using low-grade superfine iron-ore and noncoking coal without any form of agglomeration in an environment-friendly manner.

The funding for the project will be applied to the Nigel launch project, in Nigel, which aims to produce 48 000 t/y of hot briquetted iron and 24 000 t/y of ferrochrome.

Following the completion of this plant, a larger-scale production plant with an initial capacity to produce a minimum of 500 000 t/y of iron units will be commissioned in conjunction with a large iron-ore producer.

The project will receive R100-million in capital backing from the Industrial Development Corporation (IDC). The plant is expected to start production in early 2009. IMBS will hold 67% of the equity and the IDC 33%. IBMS is currently in negotiations with Kumba Iron Ore to procure the iron-ore powder that it cannot process.

Contact details for project information: IDC public relations manager Sindiso Malaku, tel +27 11 269 3891, fax +27 11 269 3894 or email sindisom@idc.co.za.

ASIA

Southeast Asian Gold, Polymetallic Projects Promising for Zedex

The Auckland, New Zealand-administered Zedex Minerals (ASX: ZDX) has found a promising new gold zone in the Say Seng Sector at the northern end of the Bau goldfield in Malaysia, while ongoing exploration on another target area, at Bekajang, has confirmed potential for another high grade target.

Latest holes at Say Seng included 10 metres grading 15.4 grams/tonne gold and 3.3m @ 9 g/t while at Bekajang the best intercept was 17m @ 12 g/t gold and others included 25.9m @ 8.12 g/t and 2.1m @ 11.72 g/t gold.

The company said that high grade carbonate-replacement style gold at Say Seng is hosted within the regional limestone formation. Zedex was targeting a discovery area first outlined by the Geological Survey of Sarawak in the 1980s.

Meanwhile, at the Pejiru zone in the Bau field analysis and re-interpretation of earlier drilling has shown several "probable open-ended extensions. An updated JORC resource statement was expected next month.

Zedex holds a 50.5% stake in the Bau goldfield project.

Earlier this year Zedex said it had received government approval for the Tien Thuan polymetallic project in central Vietnam where field work has revealed a mineralised porphyry intrusive with individual quartz veins up to 20m in width up to 2 km long within a 12 km long structural corridor.

Sampling has shown surface values of up to 30.5 g/t gold, 100 g/t silver, 1.33% copper, 11.1% lead, 7.23% zinc and 0.14% molybdenum.

The Tien Thuan prospect is 100 km west of the port city of Quy Nhon in Binh Dinh Province and it is held as a joint venture with a Vietnamese mining company owned by the provincial government. Zedex may earn a 75% stake by funding exploration through to completion of a bankable feasibility study.

Historically, Tien Thuan has been extensively mined by artisanal operators and in the 1990s high grade gold shoots were mined down to 40m from declines, adits and shafts. Artisanal mining has since been curtailed by local authorities.

Zedex said that exploration now underway includes geological mapping, soil and rock-chip geochemical surveys and ground-based EM geophysical surveys. Diamond drilling is planned for the third quarter of this year.

Source: Mineweb

Hunan Nonferrous Metals buys into North American Tungsten

China's largest nonferrous metals producer, Hunan Nonferrous Metals Corporation, has decided to invest $19.4 million to buy 9.9 percent of the shares in Vancouver-based North American Tungsten Corporation (TSX-V: NTC).

North American Tungsten operates the only tungsten mine in North America, the Cantung Mine in the Northwest Territories, one of a handful of tungsten operations outside of China and Russia. No new major tungsten production is expected to occur until 2009 at the earliest, according to the GBRM Tungsten Market Review published in January of this year.

Tungsten is used in incandescent lights, drill bits, saw blades, high temperature alloys, armor-piercing bullets and other military uses. The metal is considered an important strategic metal for defense purposes, including the industry base. Over the next five years, global tungsten consumption is expected to increase from 81,200 tonnes annually to 109,328 tonnes, according to the GBRM review.

China has the largest resource base in the world for tungsten and has been the dominant supplier for years. However, China is now absorbing most of its tungsten production, and has become a significant importer of tungsten concentrates and scrap. The Chinese government has introduced production and export quotas and is increasing export tariffs.

GBRM suggests that global prices for tungsten concentrate could exceed US$300 metric tonne units.

NTC's Cantung mine produced 21,323 metric tonnes of tungsten concentrate for fiscal year 2007 as of September 2007.

In a recent news release, North American Tungsten said Hunan was attracted to the Mactung tungsten project near the Yukon Territory/Northwest Territories border. The project was previously known as MacMillan Pass Tungsten when it was owned by Amax Northwest Mining. By 1997, the Cantung mine and the MacTung deposit were sold to North American Tungsten.

NTC CEO Stephen Leahy said, "We are pleased that the strategic nature and value of the company's world class Mactung development project has been validated by an investment of this scale by Hunan Nonferrous, which is a world leader in tungsten mining and processing and has a market capitalization of approximately $1.8 billion. This investment will help advance the development of Mactung which is due to have a feasibility study completed in calendar Q3/08."

The agreement between the two companies gives Hunan Nonferrous a seat on NTC's board, and the right to match on Mactung should a third party make an offer for the property.

Hunan will acquire 13.4 million units of NTC at a price of Cdn$1.45 per unit, representing a 36.7% premium to NTC's 10-day volume weighted average trading price and will raise $19.4 million for the development of the Mactung project.

Source: Mineweb

Russian Ferrochrome Deal to Fetch a Billion Dollars

A recent press leak in Moscow, followed by a confirming announcement from Mechel, the Russian stainless steel producer, indicated that Igor Zyuzin, Mechel's controlling shareholder, is trying to buy out chrome producer Oriel Resources, owned by Alexander Nesis and the ICT group of St. Petersburg.

Mechel's corporate office was initially reluctant to confirm the reported talks, and the company's press release said only that Mechel "is currently contemplating the acquisition of Oriel. This process is at an early stage and there can be no certainty that any offer will ultimately be forthcoming."

The target of takeover is an integrated ferrochrome producer based in the Leningrad region, the Tikhvin ferroalloy plant, with its own raw supply from two mines in Kazakhstan -- a chrome mine called Voskhod, and a nickel mine called Shevchenko. Nesis's ICT group have been involved in the chrome project for several years, when Nesis owned Polymetal, a St.Petersburg based silver miner. In 2006 Nesis sold Polymetal for $930 million in cash to Suleiman Kerimov, and began investing some of the proceeds in the chrome project.

ICT remains a private holding. Its last website posting dates from December 2006, when ICT said it had completed "the merger between its metallurgical assets and those of Oriel Resources Plc. At their latest extraordinary general meeting, Oriel Resources Plc shareholders voted in favour of the deal, which will see a new integrated metallurgical company formed by uniting Voskhod, one of the world's largest chromite ore fields, and Tikhvin Ferroalloy Works. The Voskhod field belongs to Oriel Resources Plc., while Tikhvin Ferroalloy Works, located in Tikhvin, Leningrad Region, is owned by ICT Group and its partners. ICT Group President Alexander Nesis will sit on the Board of the new company."

In 2007, Tikhvin started production of ferrochrome, with design capacity of 148,000 tonnes pa. The Voskhod mine is due to start production later this year.

Source: Mineweb

eldorado Gold's Kisladag Mine Re-opens in Turkey

Eldorado Gold's Kisladag Mine Re-opens in Turkey

Eldorado Gold President and CEO Paul N. Wright announced recently that the Kisladag mine in Western Turkey has re-opened and that production is underway with leaching expected to resume immediately.

The injunction that closed the mine was essentially rendered moot by a February 6th decision by the Sixth Department of the High Administrative Court in Ankara, Turkey, which remanded the case back to the lower court.

The high court ruled that existing expert reports prepared for the Lower Administrative Court concerning the Environmental Impact Assessment (EIS) for the Kisladag gold mine were insufficient to enable the court to make a positive or negative decision on the merits of the case. Kisladag has been the focus of a three-year legal battle between environmental attorneys--representing an unidentified environmental organization aimed at stopping the spread of gold mining in Turkey-and Turkey's Environmental Ministry, which approved the Kisladag EIS in 2003.

The open-pit, heap leach gold mine is planned to produce 240,000 ounces annually over a 14-year mine life. It had been operating 15 months before the temporary injunction was issued by the lower court.

AUSTRALIA

BHP Says Rio Offer Won't Be Made Until Late 2008

BHP Billiton (BHP) Chairman Don Argus indicated recently that the campaign to buy fellow Anglo-Australian mining giant Rio Tinto PLC (RTP) to form the world's third-biggest company, will be a long one, likely stretching out until next year.

It will take Melbourne-based BHP, which is already the world's biggest mining company, until late 2008 to clear antitrust and other regulatory hurdles and then post an offer to Rio Tinto's shareholders, Argus said Wednesday in a presentation to retail investor group the Australian Shareholders Association.

BHP last month made a public bid of 3.4 of its shares for each Rio Tinto share, sweetening a previous 3-for-1 proposal and valuing the target at around $ 147 billion at present valuations. But Rio says the bid still fails to recognize the value of its assets and has refused to talk to BHP. At recent share prices on the Australian Securities Exchange, the bid is at an 18% premium to Rio Tinto's share price before BHP's initial approach was made public in November.

Argus reiterated BHP's line that a merged mining company would give better returns and urged shareholders of London-based Rio Tinto to focus on a 45% premium in the value of BHP's all-stock offer when applied to the share prices before BHP's approach.

"The process has a long time to run, nobody has to decide anything just now," Argus said. "Rio Tinto shareholders should have two legitimate questions to ask their board: How can they justify rejecting the 45% value upward delivered by our premium, and how does the Rio Tinto board propose to deliver to its shareholders the value of the implied premium" if the board refuses to engage with BHP.

A Rio Tinto spokeswoman in Melbourne said Angus's presentation offered nothing new and she declined to make any other comment.

If the bid is successful, based on recent stock prices, BHP would become the third biggest publicly listed company in the world by market value, coming in after Petrochina Co. (0857.HK) and Exxon Mobil Corp. (XOM), Argus said.

Argus reiterated comments by BHP Chief Executive Marius Clappers that the company's petroleum business isn't for sale, addressing speculation the company is looking to offload the division.

To say the group's petroleum division doesn't fit with the diversified mining group's operations is "ill-informed and naive," Argus said. "BHP Billiton Petroleum isn't for sale" and will continue to be part of the business, he said.

Argus declined to answer a question on whether BHP was holding out for a bigger hike in contract iron ore prices after rival Companhia Vale Do Rio Doce ( RIO) secured a 65% price increase in negotiations with steelmakers.

Usually the three big iron ore miners, Vale, BHP and Rio Tinto fall into line after one settles, but Rio Tinto is holding out for a rise of 71% for next Japanese fiscal year due to its Australian mines being closer to Asia than Vale's mines in Brazil. BHP has said it won't comment until negotiations are complete.

Source: Dow Jones Newswires

Boom Year for Australian Mineral Exploration

While the search spend in the current financial year may provide a new record the total exploration expenditure in Australia in 2006-07 was an impressive $A1.714 billion ($US 1.6B). And 38% of this was spent seeking new deposits.

A review released recently by Geoscience Australia - effectively the mines department of the Federal Government - cited two huge lifts in resource inventories. BHP Billiton's Olympic Dam in South Australia achieved a 77% increase in resource tonnages to 7.738 Bt @ 0.87% copper, 0.29 kg/t U308, 0.3 grams/tonne gold and 1.61 g/t silver; while AngloGold Ashanti-Independence Group's Tropicana deposit in Western Australia announced a maiden 4 M ounce resource.

There were spending hikes in all States and in the Northern Territory and while the dominant mining state of WA had the greatest expenditure, it was SA and the NT that had the most rapid increases.

In the past two decades South Australia has gone from being a Cinderella mining state to one that now has most available exploration ground covered, thanks to its aggressive policy of providing sophisticated exploration data and creating drilling grants for companies undertaking grass roots exploration.

On the other side, while WA still dominates the national search spend, its proportionate increase has been less spectacular, in part due to negative WA government policies that includes a snail-paced licence and project approvals system, not helped by unworkable native title procedures that are no longer that evident in some other states.

Geoscience Australia said that in 2006-07 about 66% of the exploration expenditure was on deposits for which at least an inferred resource had been established.

Gold remained the largest individual commodity targeted but its relative share of total exploration spend fell to 27% because of the accelerated exploration for iron ore, uranium, base metals, coal and mineral sands.

"The surge of interest in uranium exploration spending rose by 103% to $A114.1 M ($US M) said Geoscience Australia.

Source: Mineweb

Tri Origin Minerals Ltd Feasibility Study Shows Woodlawn Project Could Lift Production

Tri Origin Minerals Ltd (ASX: TRO) said recently that adding the re-processing of mine tailings at the Woodlawn project near Goulburn could lift total planned production to between 120,000-140,000 tonnes per annum of copper and zinc concentrates.

The company, now owned 53.9% by its Canadian parent Tri Origin Exploration Ltd (TSX: TOE), had earlier shown that an underground operation may justify a stand-alone plant and the board then decided to undertake a feasibility involving retreating tailings to provide about 60,000 tpa of copper and zinc concentrates.

The underground project will involve reopening the Woodlawn underground mine to access high grade zones that remained after operations ceased in 1998.

Tri Origin Minerals managing director, Bruce Robertson, said the respective stand-alone studies have now progressed to the point where consideration is being given to a staged development scenario, beginning with the tailings re-treatment project. This would be followed by incremental expansion into a fully integrated processing operation treating both tailings and ore.

Estimation of the resource in the North Tailings Dam began after sampling from drilling last year. Robertson said the resource appears likely to be about 2 million tonnes, similar to the average grades of the 8.6 Mt measured-to-inferred resources in the South and West tailings dams.

The company recently released some new drilling results including two holes into the C2 Lens, where intercepts were made at about 440 metres depth. The zone is associated with a large remnant pillar and was the largest individual lens mined, constituting 35% of the current underground resource. One drill hit had an interval of 7.3m @ 1.66% copper, 4.87% lead, 12.34% zinc, 171 grams/tonne silver and 2.32 g/t gold.

A drill hole into A and B1 Lenses is scheduled to be completed soon, however, historical assays adjacent to the hole have given an estimated true width of 12m @ 1.2% Cu, 6.2% Pb, 16.6% Zn, 121 g/t Ag and 0.1 g/t Au.

The company said that Cowley Hills, 2 km north of Woodlawn and originally mined by Denehurst Ltd in 1990, produced 40,000t of good grade ore and there was potential for an additional resource.

Intierra's Minmet resource database shows that Woodlawn had past production of 18 Mt mined @ 2% Cu, 4% Pb, 10% Zn, 80 g/t Ag and 0.4 g/t Au. Minmet put the proven-probable reserve at 1.17 Mt @ 2.3% Cu, 2.9% Pb, 9.2% Zn, 47 g/t Ag and 0.42 g/t Au and the measured-to-inferred resource at 18.69 Mt @ 1.21% Cu, 2.77% Pb, 6.54% Zn, 58 g/t Ag and 0.43 g/t Au.

There is a net smelter royalty on the project of 0.5% for Barrick Gold Corporation, inherited in its takeover of Placer Dome.

Zinifex and Oxiana Announce Merger

A diversified new mining company - yet to get a name -- and the third largest on the Australian Stock Exchange, will evolve from the planned merger of Zinifex Ltd and Oxiana Ltd.

The chief executives of both companies said in a recent webcast that this would be a "merger of equals" with a market capitalisation of $A12 billion ($US11.208 B), and would be the world's second largest zinc producer and a substantial producer of copper, lead, gold and silver.

The net cash for the merged company, to be based in Melbourne where both compares are headquartered, would be about $A1.9 B ($US1.77 B) based on December 30 accounts.

The merger, approved by both boards with all directors invited to join the new entity, involves Oxiana shareholders being asked to accept 3.1931 Oxiana shares for one Zinifex share, a balance issue due in part to the fact Zinifex became flush with funds late last year through the sale of its global smelters for $A950 M ($US887 M) into the huge Nyrstar float. Oxiana in comparison was carrying a large proportion of the merged vehicle's debt of $A539 M ($US503 M) through its project, corporate acquisitions and high spend on developing the big Prominent Hill copper-gold project in South Australia.

Zinifex's chief, Andrew Michelmore, who took over the helm from Greg Gailey at the end of last year, will be chief executive of the new company, while Oxiana's CEO Owen Hegarty has agreed to join as a non executive director but chairman of the board integration committee.

At a recent presentation to shareholders on the half-year result, Zinifex's Michelmore showed a graph forecasting growth ahead for the company, predicting that after 2014, without positive change on existing operations, there would be a slide in produced metal that - even with new projects being introduced - could become a slippery dip.

In answer to Webcast questions from mining analysts, Michelmore and Hegarty said:

The break fee on either side of $A50 M ($US46.7 M) was considered the norm - about 1% of the total merger consideration.
Zinifex's takeover of new Tasmanian nickel producer Allegiance Mining NL (ASX: AGM) would go ahead and give Zinifex entry into the nickel mining business and, while Allegiance's Avebury mine life was considered medium, the prospectivity for new reserves was significant. Michelmore agreed that to put muscle into a new nickel division may require another significant acquisition.
Both CEOs believe that recent negativity over the zinc price has been overplayed and the future of this metal, as well as copper, was strong given not just increasing demand from China but industrial growth in other countries.
Michelmore believed that parts of Africa and South America were not considered places to be (Guinea, Nigeria and Sierra Leone because of civil and other issues; and countries in Latin America with political and other issues), although there were strong opportunities in other African nations and Argentina, Brazil, Chile and parts of Ecuador were also offering good opportunities).
A hiving off of gold assets apparently won't be discounted. Hegarty said Oxiana had looked at that option in the past and he imagined it could be considered in the future.

The merger would see Oxiana and Zinifex, respectively now eighth and ninth in ranking on the ASX top 200 resource companies, leapfrog to fifth ranking behind BHP Billiton, Rio Tinto, Fortescue Metals and gold producer Newcrest Mining.

Lihir Production Expansion to Cost US $696 million

Lihir Gold Ltd, the second-largest gold mining company on the Australian Stock Exchange, will spend US$696 million, about a quarter more than estimated, to raise annual production 43% at its mine in Papua New Guinea.

The expansion will cut production costs by about US$80/oz to less than US$400/oz, increase output by an average 240,000oz/y and be funded from cash flows, the Port Moresby- based company said recently in a statement.

Surging prices for raw materials, energy and labor have increased the costs of expanding mining and energy projects for companies including BHP Billiton and Oxiana Ltd. Lihir chief executive officer Arthur Hood said in February the company`s US$550 million spending estimate for the expansion would likely increase.

"Across the entire sector there are blowouts," Hunter Hillcoat, an analyst at Austock Securities Ltd in Sydney, said by phone. He had a US$704 million cost estimate. "To be on the safe side, you always add between 10% and 20% to estimates."

NORTH AMERICA

Carmeuse to Acquire Oglebay Norton

Carmeuse North America, a wholly-owned subsidiary of Carmeuse Group, and Oglebay Norton Company (Pink Sheets: OGBY.PK) announced that they have entered into a definitive agreement under which Carmeuse will acquire all of the outstanding shares of Oglebay Norton for $36.00 per share in cash.

The transaction, which is expected to close by the end of the year, is subject to, among other things, the

expiration or termination of the Hart-Scott-Rodino Act waiting period and approval by Oglebay Norton

shareholders. The Special Committee of Oglebay Norton's Board of Directors has approved the merger

agreement and unanimously recommends that all Oglebay Norton shareholders vote in favor of the transaction.

The merger agreement contains a customary provision allowing the Oglebay Norton Board of Directors or the Special Committee to terminate the merger agreement in the event it receives another offer to purchase Oglebay Norton on terms more favorable to its shareholders than those contained in the merger agreement.

The acquisition provides market diversity for Carmeuse. In particular, Oglebay Norton's limestone business provides added resources to serve the rapidly growing Flue Gas Desulfurization (FGD) market, in which Carmeuse has a high level of technical expertise.

Feasibility Study and Project Notice Submitted for Massive Pueblo Viejo Gold Project

A feasibility study and project notice for the $2.7 billion Pueblo Viejo gold project, potentially the second largest gold mine in the Americas, has been submitted to the Government of the Dominican Republic.

Pueblo Viejo Dominicana Corporation (PVDC), a company jointly owed by Barrick Gold (60%) and Goldcorp (40%), would represent the largest foreign investment in the country.

Ever since Placer Dome announced years ago that it was interested in the Pueblo Viejo project, mining and exploration companies have been flocking to the Dominican Republic, attracted by its recent relative political stability and the Central American Free Trade Agreement. The entire country is expected to be geologically mapped by 2010, despite the fact that its geological service was only founded in 1998.

The Dominican Republic has enjoyed strong GDP growth since 2005. In 2007, exports were bolstered by the nearly 50% increase in nickel prices; however, prices are expected to fall in 2008, contributing to a slowdown in GDP growth for the year, according to the CIA World Factbook. Although the economy is growing at a respectable rate, high unemployment and underemployment continued to be a formidable challenge. The poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoys nearly 40% of national income.

Originally discovered by the Spaniards in 1505, Pueblo Viejo was mined, latterly by the Dominican Government, since the early 1970s until mine operations were halted in 1999. Over the years, thousands of nearby villagers had been impacted by acid water drainage and mine waste. However, Barrick insisted that the Dominican Government must help pay for the estimated US$100 million in clean up before the world's largest gold miner decided to proceed with the project.

As of December 31, 2007, total probable and proven reserves for Pueblo Viejo were estimated at 20.4 million ounces of gold, 423.6 million pounds of copper and 117.3 million ounces of silver. Gold production is projected to be 1 million ounces annually during the first five years of operation within an estimated 25 years of mine life.

The mining project is expected to generate 3,500 jobs during construction and more than 1,000 mining jobs over the next 20 years. Barrick has already started professional development and training programs for local communities, to prepare residents to work both in the construction and mining phases of the project. PVDC has also funded a series of programs in health, employment, education, infrastructure, and cultural traditions that seek to benefit the provinces of Sanchez Ramirez, Monseñor Nouel and Barahoma.

An agreement was recently signed with the Association of Development of San Jose de Ocoa (ADESJO) to foster small development projects in communities bordering the mine, which will focus on developing the economy of these rural communities through supporting reforestation and agriculture.

Goldcorp's share of preproduction capital is expected to be $1.08 million. Goldcorp's share of gold production is anticipated to be 400,000 ounces a year during the first five years of mine life at a total cash cost of $250 per ounce. Cash cost estimates do not include the potential benefit of a proposed zinc recovery circuit now being evaluated.

Construction of the project is anticipated to take three and a half years. The $2.7 billion capex has increased from the original $2.1 billion-$2.3 billion estimate of February 2007, reflecting a planned throughput rate increase to 24,000 tpd from 18,000 tpd.

McIlvaine Company

Northfield, IL 60093-2743

Tel: 847-784-0012; Fax: 847-784-0061

E-mail: editor@mcilvainecompany.com

Web site: www.mcilvainecompany.com