Melbourne Mining Club - Luncheon

Value Creation in the Gold Mining Sector

Melbourne Mining Club

October 9, 2014

FORWARD LOOKING STATEMENTS

This presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Goldcorp Inc. (“Goldcorp”). Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver, copper, lead and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and other risks of the mining industry, as well as those factors discussed in the section entitled “Description of the Business – Risk Factors” in Goldcorp’s annual information form for the year ended December 31, 2012 available at www.sedar.com. Although Goldcorp has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws. All amounts are in U.S. dollars, unless otherwise stated.

2

1,223

1,154

1,050

2012 2013 2014E

Cost Improvements

All-In Sustaining Costs are Trending Lower

3 Source: TD.

Industry AISC ($/oz)

• AISC is forecast to be 14% lower in 2014 than in 2012

Peak Gold Discoveries peaked in 1995

4

• Peak gold discovery occurred in 1995 at ~175 million ounces • Annual discoveries have fallen to less than 50 million ounces in recent years • This trend is in spite of much higher exploration budgets

Peak Discovery

Gold in Major Discoveries 1990 - 2013

Source: SNL Metals Economics Group.

Peak Gold Development time is approaching 20 years

5

• Average development times have been steadily increasing • In the next few years average development time is expected to be ~20 years

• Increased environmental regulation, social obligation and land-use restrictions have contributed to longer lead times

Average Development Time (Discovery to Production)

~20 Years (recent average)


70

75

80

85

90

95

100

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

An

nu

al P

rod

uct

ion

(M

oz)

Peak Gold Peak production is expected ~2015

6

• Peak Gold production is expected in ~2015 • This coincides with a ~20 year development cycle from peak discovery

Peak Production

“Peak Gold”

Source: Consensus estimates. Includes CPM Group, GFMS, and Metals Focus.

Peak Discovery

+ 20 years average development time


3-y

ear

run

nin

g av

erag

e go

ld d

isco

vere

d (

Mo

z)

Gra

ssro

ots

+ 7

5%

of

late

-sta

ge e

xplo

rati

on

bu

dge

ts (

US$

M)

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

(500)

(300)

(100)

100

300

500

700

Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Overall Demand Components of Demand

7

• Physical demand spiked as ETF redemptions increased • Technology and central bank demand has remained flat

Quarterly Demand

Ton

ne

s

Ton

ne

s

Source: World Gold Council.

Jewellery

Bars and coins

ETFs

Central Banks

Technology

Total Demand

(6,000,000)

(4,000,000)

(2,000,000)

-

2,000,000

4,000,000

6,000,000

Imports (oz)

ETF Change (oz)

Chinese Demand Gold Imports Through Hong Kong

8

• Gold has flown from West to East as ETF liquidations were offset by Chinese buying

Source: Bloomberg.

China Imports vs ETF Change (oz)

Ou

nce

s

Chinese Demand Shanghai Premiums

9

• Chinese investors stepped in and aggressively purchased gold during the price drop from March – December 2013

• Premiums reached a high of ~$50/oz in April 2013 and have averaged $9/oz since 2010

Gold Spot vs. Shanghai Premiums ($/oz)

Source: Bloomberg. Premium calculated as 5-day rolling average premium between Shanghai 99.999 Au price and international Spot price.

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

-20

-10

0

10

20

30

40

50

60

Spo

t P

rice

($

/oz)

Pre

miu

m (

$/o

z)

Premium

SPOT

The Gold Sector

Gold equities have underperformed gold the last 10 years

10 Source: Bloomberg

0

50

100

150

200

250

300

350

400

450

500

Goldcorp

Equities

Gold

Gold +189%

Goldcorp +79%

Gold Stocks

10 Year Price Performance

• Rising costs and compressed margins led to lower cash flow than expected

The Gold Sector

What will we do differently this time?

11

Exercise financial discipline: • Cost control • Deferral of marginal new projects and expansions • Generate Free Cash Flow • Smart allocation of Free Cash Flow:

• Sustainable dividends • High-return new projects

Understand the investment proposition: • Investors expect leverage to gold price • Do not allow marginal production increases to destroy the margin growth

expected with gold price increase

All-in Sustaining Costs and Margins

Costs have risen in proportion to the gold price

12 Source: TD.

Industry AISC Margins vs Gold Price

• Cost inflation has kept pace with the gold price

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

200

400

600

800

1,000

1,200

1,400

1,600

1,800

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

E

AIS

C M

argi

n (

%)

Go

ld P

rice

($

/oz)

Gold Price AISC Margin

All-in Sustaining Costs and Margins

Margins have not increased with the gold price

13 Source: TD.

Industry AISC Margins vs Gold Price

• AISC margins took a big hit in 2013 when the gold price dropped

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1.6

1.7

1.8

1.9

2.0

2.1

2.2

2.3

04 05 06 07 08 09 10 11 12 13

Ave

rage

Go

ld P

rice

($

/oz)

Ave

rage

Gra

de

Min

ed

(g/

t)

Year

Average Grade of Gold Mined Average Gold Price ($/Oz)

Lack of Margin Growth

Chasing marginal ounces

14 Source: CPM Group.

• The industry rapidly lowered mined grade as the gold price increased • Average head grade has moved with an ~80% inverse correlation to gold price

R-squared: 0.77

Industry – 10 year average grade vs gold price


Mining above average reserve grades

15

• The industry has consistently mined ore above average reserve grades

Industry – 10 year Reserve Grade vs Processed Grade

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

04 05 06 07 08 09 10 11 12 13

Ave

rage

Gra

de

(g/

t)

Year

Average Grade of Gold Mined Reserve Grade (g/t)

Source: CPM Group and Bloomberg. Average grade mined is global average. Average reserve grade is for senior gold companies.


Example - Effect of grade on margin

16

• Lower grades in response to higher gold price lead to lower margins • The example below increases throughput and production but actually lowers margin

even with a rising gold price

Year 1 Year 2

Gold Price ($/oz) 1,000 1,200

Grade (g/t) 2.00 1.60

Ounces (oz) 100 120

Throughput (tonnes/year) 1,600 2,400

AISC ($/oz) 800 1,000

Cost ($) 80,000 120,000

Cash Flow ($) 20,000 24,000

Margin (%) 20% 17%


Example - Effect of grade on margin

17

• Lower grades in response to higher gold price lead to lower margins • The example below increases throughput to sustain production at lower grades

Year 1 Year 2

Gold Price ($/oz) 1,000 1,200

Grade (g/t) 2.00 1.60

Ounces (oz) 100 100

Throughput (tonnes/year) 1,600 2,000

AISC ($/oz) 800 1,000

Cost ($) 80,000 100,000

Cash Flow ($) 20,000 20,000

Margin (%) 20% 17%

Financial Discipline

Opportunity to restore valuations

18

• P/NAV multiples averaged ~1.8x for about 30 years since 1985 • Multiples have come down , and are much lower than at previous lows in the gold

price

Industry – Historical P/CF Industry – Historical P/NAV

Source: Scotiabank.

Value Creation in the Gold Mining Sector

Melbourne Mining Club

October 9, 2014