This may be why Goldcorp would pay what at first glance appears to be $765./oz. for 4.7 mil oz. Au equiv. at Cerro Negro, Argentina.
The veins at Cerro Negro "remain open at depth", and the company expects to find higher grade and higher margin deposit results at San Marcos and Mariana Deposits from the latest exploration drilling results.
Cerro Negro has 25,000 hectares in it, which is 96 sq. miles, with 10 currently identified prospect areas with gold showing.
"The property contains a large, very prospective land package, with a rich network of near-surface gold veins that are easily mineable at very low costs. The focus of current efforts is on growing gold reserves through exploration of these veins and testing new vein targets."
What Goldcorp implies is that it expects to find much larger reserves and resources than the newly increased 4.7 mil oz. Au equiv. at Cerro Negro. Their 96 sq. mile property with gold veins on 6 sites open at depth, and other prospects not yet explored or drilled, are what drove the company to pay $3.6 bil.
The tone of Goldcorp's site indicates they expect to find and mine much larger millions of oz's of Au equiv. at Cerro Negro. How much more? They don't say. But if they expect to find double the current approx. 5 mil oz. Au equiv. that they have "on the books", then their cost/oz. Au equiv. would be around $400./oz. Au equiv, not 765./oz. $400/ oz. for Au is top dollar paid in the last few yrs. for developed mines.
