Jeff Wilhoit - VP,IR Chuck Jeannes - President & CEO George Burns - EVP & COO Lindsay Hall - EVP & CFO

Andrew Quail - Goldman Sachs John Bridges - JPMorgan Chris Terry - Deutsche Bank Greg Barnes - TD Securities Patrick Chidley - HSBC David Haughton - CIBC World Markets Andrew Kaip - BMO Capital Markets Anita Soni - Credit Suisse Tanya Jakusconek - Scotiabank

Welcome to the Goldcorp Inc Q3 2015 results conference call for Thursday, October 29, 2015. Please be advised that this call is being recorded. I would now like to turn the meeting over to Mr. Jeff Wilhoit, President, Investor Relations of Goldcorp. Please go ahead, Mr. Wilhoit.

Thank you. I'm Vice President of Investor Relations, but thank you anyway. Welcome to the Goldcorp third-quarter conference call. Among the senior management in the room with me today are Chuck Jeannes, President and Chief Executive Officer; Lindsay Hall, Executive Vice President and Chief Financial Officer; George Burns, Executive Vice President and Chief Operating Officer; Russell Ball, Executive Vice President, Corporate Development and Capital Projects. For those of you participating on the webcast, we've included a number of slides to support this afternoon's discussion. These slides are available on our website at www.goldcorp.com. As a reminder, we will be discussing forward-looking information that involves unique risks concerning the business, operations and financial performance and condition of Goldcorp. Forward-looking statements include but are not limited to statements with respect to future metal prices, the estimation of mineral reserves and resources, the timing and amounts of estimated future production, cost of production, capital expenditures and cost and timing of the development of new deposits. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements. With that, I will now turn the call over to Chuck Jeannes, President and Chief Executive Officer.

Thanks, Jeff and thank you, everyone, for joining us today. Back in 2011, Goldcorp embarked on an ambitious program of concurrently financing and building two new high quality gold mines in two very different jurisdictions, Eleonore in Quebec and Cerro Negro in Argentina. Today, our third-quarter results illustrate the operational and cash generating strength that we envisioned when we first set out on this now completed mine construction program, even as the gold price has significantly weakened over the past four years. These capital investments have greatly enhanced our asset portfolio and positioned Goldcorp to provide strong free cash flow generation, even amid the current gold price environment. This cash flow also allowed us to pay off our revolving credit facility this quarter, enhancing what we believe is the strongest balance sheet in the gold sector and positioning us for long term success, regardless of metal prices. We're pleased to report record quarterly gold production of 922,000 ounces for the quarter, as these new mines assumed a greater proportion of overall production and our flagship Penasquito mine continued its steady run of strong performance. We also reported all-in sustaining costs at $848 per ounce. We had inventory write-downs at our two Mexican mines, primarily due to gold price and excluding these non-cash write-downs, all-in sustaining costs were an even stronger $802 per ounce. Adjusted operating cash flow met expectations, totaling $374 million or $0.45 per share and we saw another quarter of growing free cash flow, as I said, reaching $243 million or $168 million after payment of our dividend. Looking more closely at our operational performance, I continue to be extremely pleased with the performance of Penasquito and we'll exceed our production guidance there between 700,000 and 750,000 ounces for the year. We also saw strong production at Cerro Negro and Musselwhite. At Eleonore, production doubled from the prior quarter, despite some teething pains. Eleonore is a very high-quality gold mine that is only going to get better, as the team there works through the issues. Remember, this is a big underground mine with a two-year ramp-up to full production and we're on track with those overall expectations. At all of our mines, as well as at the corporate office, everyone at Goldcorp is 100% focused on cost control and productivity enhancements. What we call operating for excellence or O4E. As I've said before, we're well aware that in a flat gold price environment, the only way we can provide margin growth is through declining costs. As you saw in our all-in sustaining cost performance this quarter, we continue to meet this challenge. And cost control will continue to be a prime focus, as we complete preparation of our 2016 budgets. Reflecting our confidence in the portfolio, we reconfirmed our production and cost guidance this morning, with production expected to be at the upper end of between 3.3 million and 3.6 million ounces, at all-in sustaining costs of between $850 and $900 per ounce. We decreased our DD&A guidance to $450 an ounce from prior guidance of $425 per ounce -- sorry we increased. Lindsay will elaborate on those accounting items shortly. With our new project capital investment spend winding down as planned, we've also reconfirmed overall capital spending between $1.2 billion and $1.4 billion. We remain well-positioned for a strong finish to a great year. As I'm sure you're aware, the market performance of the gold miners has outperformed the price of gold over the last several months, as investors begin to absorb the reality of improved operating and financial performance of the sector at a lower price environment. We believe there's more room for relative out performance, but we also believe we're getting close to the end of the gold bear market. U.S. Fed actions and inactions, Asian economic data and the other factors have done little to dampen the world's appetite for owning gold. Regular participants on our quarterly earnings calls may be familiar with this slide, depicting the likelihood of a peak gold scenario and I include it here again to illustrate what I believe is an emerging trend in support of a higher gold price over time. As at least one of our counterparts in the base metals world has recently reminded us, the best cure for low commodity prices is low commodity prices. This is certainly true in the gold industry, where we've seen that it's nearly impossible to make a new discovery that's economic at $1100 gold. The message here is simple. Gold supply will be tightening going forward and those companies like ours with the best assets will be uniquely positioned to benefit from this trend. Looking ahead, we remain focused on what we can control, delivering safe production at low all-in sustaining costs to achieve our 2015 guidance. We will also seek to translate the exploration success we've seen this year at Cerro Negro, Eleonore and other sites to at least replace mined gold reserves, even at a lower reserved price. In terms of news flow, we're in the midst of work on our 2016 budgets and updated mine plans and we look forward to providing our guidance expectations for 2016 and beyond, early in the new year. I remain extremely excited by the opportunity to sustain Goldcorp's compelling investment proposition further into the future and look forward to speaking with you then. And with that, I'm going to turn it over to George.

Thanks, Chuck. I'm very pleased to report Goldcorp's mines delivered safe third-quarter gold production of 922,200 ounces at low all-in sustaining costs of $848 per ounce or $802 per ounce excluding impairments. Chuck has pointed out our strong execution at Penasquito, Cerro Negro and Musselwhite, but most of the portfolio delivered at or near production cost expectations quarter to quarter. We also continued to see wins from our operating for excellence program. Through the first nine months of the year, we have realized benefits of approximately $250 million. Some good examples across the organization include higher gold and silver recoveries at Cerro Negro, further deployment of remote mucking and drilling at our underground mines, mechanization of the historic Upper Red Lake into lower-cost bulk mining and lower unit cost mining at Penasquito in the mine. Importantly, our teams see further opportunities to lower cost and increase productivity across the sites. At Penasquito, the largest gold mine in Mexico remains on track for a record year. For the third quarter, safe gold production was 236,800 ounces at an all-in sustaining cost of $467 per ounce. As we discussed last quarter, the higher sulfide gold grades resulted from positive model reconciliation, as mining took place in the heart of the deposit. Gold grades are expected to continue to moderate into the fourth quarter, as we move into a new phase of the ore body. The team at site has done a good job of increasing the mining rate which is driving down our mine unit costs. In addition, we're realizing cost savings following the start-up during the quarter of the Energen electric generating plant. Conversion of natural gas-fired electric power generation will also contribute to a reduction of Penasquito's carbon footprint. Construction of the northern well field remained suspended throughout the third quarter of 2015, due to an illegal blockade by a local community. The site continues to seek a fair resolution of this matter, while taking steps to enforce our contractual rights. Penasquito is also advancing alternatives for completion of the project by rerouting the infrastructure. Contingency planning is ongoing for additional water supply to the Penasquito mine until the well field project is operational. I'm confident water that we need to sustain operations until the resolution will be reached or solemn. The metallurgical enhancement project feasibility study progressed during the quarter and is on track to be completed early in the new year. This study includes both a pyrite leach circuit and our proprietary concentrate enrichment project, each of which will be separately considered for advancement. During the quarter, pilot plant testing was completed and work continued to confirm capital and operating costs. At Camino Rojo, work continued to advance the pre-feasibility study which is on track to be completed in 2016. An update of the geologic model continued during the third quarter and metallurgical testing of sulfite transition and oxide zones also advanced. Cerro Negro continued to ramp up successfully with the third-quarter safe gold production totaling 135,700 ounces at an all-in sustaining cost of $731 per ounce. Increased production resulted from further ramp-up of mining rates at the Mariana Central and Eureka underground mines. Total tons milled increased, resulting in average throughput during the third quarter of 3,700 tons per day. Average milling rates in September surpassed nameplate capacity of 4,000 tons per day, ahead of schedule. On the exploration front, the news continues to be very positive. We continued our resource definition drilling program, expanding resources at Mariana Central complex, particularly in the newly Emilia vein, where we're seeing strong grades. We're well-positioned to grow gold reserves this year at Cerro Negro. Turning to the work stoppage we announced at the end of September, we're having constructive discussions with the union that represents the mine workers, while maintaining normal operations. Turning to Eleonore, third-quarter safe gold production totaled 86,700 ounces, at an all-in sustaining cost of $974 per ounce. As Chuck mentioned, this was a doubling of the prior quarter as a result of the expansion of the underground mine from two to four horizons, additional mine optimization efforts and continued ramp-up of the mill throughput. Throughput during the quarter averaged 6,500 tons per day and some days we have exceeded nameplate plant design of 7,000 tons per day. As throughput is ramped up, the presence of pyrrhotite and iron sulfide has intermittently impacted concentrate leaching circuit kinetics, leading to lower than expected recoveries during the quarter. We're making good progress to overcome this recent issue. As previously announced, prior to our site tour in September, in situ ore grades and initial stopes in horizon four have been as expected, but folding is being encountered. Mining in these areas is resulting in higher dilution and therefore lower than planned mine grades and gold production. The folding is of varying intensity and is estimated to affect approximately 10% of the overall Eleonore deposit. The Eleonore team continues to work on adjusting stope designs to minimize these impacts. Include in that work have been smaller stope designs, improved fragmentation and better material handling. The folding and recovery issues have the potential to negatively impact 2015 production guidance of between 250,000 and 270,000 ounces. We continue to overcome typical ramp up challenges and I'm confident that these are short-term issues that will not affect the long term performance of Eleonore. We continue to receive good news on the exploration front at Eleonore as well that support our expectation for reserve growth again this year. Work on the Eleonore Crown Pillar pre-feasibility studies continued to advance during the third quarter, with completion expected by the end of the year. On this slide, you can see quarter over quarter, the increase in gold production and the throughput, showing consistent performance from the plant. As we move towards the end of the year and the depletion of the low-grade stock pile, the key focus continues on the ramp-up of the underground. Turning to Red Lake, safe gold production totaled 77,600 ounces at an all-in sustaining cost of $1,028 per ounce. Production was lower than the prior quarters as a result of lower grades from remnant mining at the Campbell complex, mining in the lower grade sulfide zone and lower than expected grades in the foot wall zone. At our HG Young discovery, exploration continued to advance north from the 14 level at the Campbell complex. This trip provides new drill platforms for follow-up underground drilling on several positive intercepts from the ongoing surface exploration program and we're working towards initial resource by the end of the year. At Cochenour, our exploration drilling continued to assess the core areas of deposit as well as the tram level, where a change in the orientation of the veins was detected. We're advancing detailed interpretation on analysis to support final mine planning and optimal placement of the infrastructure to set this mine up for long term success. Processing of mill feed from the initial sill development work was consistent with expectations. rilling is confirming pre-acquisition results in the upper portion of the deposit. We believe Cochenour will be a strong contributor to Red Lake in the future. Work is ongoing to define the timing of initial stope production and ramp-up of Cochenour feed for processing at Red Lake. With that, I will turn the call over to Lindsay.

Thanks, George. As demonstrated with our record quarterly gold sales, the growth and the contributions of our recent Los Filos gold mine helped onset the downward pressures the industry is experiencing in the current commodity price environment. At an average realized gold price of $1,114 per ounce on gold sales of some 942,000 ounces, the Company generated adjusted revenues of $1.3 billion and adjusted operating cash flow of $374 million for the quarter. Byproduct and co-product cash costs for the third quarter were $597 and $670 per ounce respectively, compared to $547 and $656 per ounce in the prior quarter. The increase in cash costs is due primarily to the impact of the inventory write-downs of the lost heat leach value. All-in sustaining costs for the third quarter were $848 per ounce, compared to $846 per ounce in the prior quarter. As Chuck has mentioned, it would have been $46 an ounce lower without stockpile inventory write downs. We reported a net loss in the quarter of $192 million or $0.23 per share. Excluding the usual impact of unrealized losses from the foreign exchange translation of deferred income taxes, adjusted net loss totaled $37 million or $0.04 per share in the third quarter of 2015, compared to an adjusted earnings of $65 million or $0.08 per share in the previous quarter. Both reported and adjusted net loss were impacted by lower realized metal prices during the quarter and a $40 million or $0.05 per share reduction in the inventory carrying values primarily at Los Filos. We also experienced higher depreciation quarter over quarter due to a change in the mix of our production, with more production coming from our newer and higher DD&A per ounce mines, like Penasquito, Cerro Negro and Eleonore. Additional assets were placed in service that were not forecasted and the $19 million related to the non-cash portion of the inventory write-downs. The Company generated adjusted operating cash flows $374 or $0.45 per share which is before the positive change in non-cash operating working capital of $132 million. Given these operating results and capital expenditures on a cash basis of $263 million for the quarter, the Company generated positive free cash flow of $243 million in the third quarter. Turning to provisional pricing, we had a negative $15 million provisional pricing impact at Penasquito and a negative $1 million impact at Alumbrera. The provisional sales at September 30, 2015 at Penasquito include 155,270 ounces of gold priced at $1,114 per ounce, 4.2 million ounces of silver at $14.65 per ounce, 68 million pounds of zinc price at $0.75 per pound and 28 million pounds of lead, priced at $0.75 pound. While at Alumbrera, we have 18,567 ounces of gold, priced at $1,115 per ounce and 14 million pounds of copper priced at $2.35 per pound. Regarding depreciation and depletion or DD&A per ounce, we expect it to increase to $450 per ounce for the year, from the previous guidance of $425 per ounce, due primarily to the impact of the mix of our production with more production coming from our newer and higher DD&A per ounce sites like Penasquito and additional assets such as the Overland waste rock conveyor at Penasquito placed in service earlier than anticipated. Goldcorp's DD&A per ounce is higher than most of our peers, primarily a result of the fact that we have newer, younger mines like Penasquito, Cerro Negro and Eleonore. The costs associated with acquiring or building these assets are amortized over the existing reserve base, to determine a DD&A per ounce. With these younger new mines, the DD&A per ounce will start out high and as exploration success converts more ounces to reserves which increases the denominator that these costs are amortized over, the DD&A per ounce is expected to decrease. So, while the depreciation expense in the early years will have a negative effect on a reported earnings, it doesn't dilute the abilities of these new mines to generate free cash flows. We're pleased to have generated positive free cash flow after dividend of $168 million in the third quarter. As planned, we fully repaid our revolving credit facility balance. This, in combination with our positive cash balance leaves us with $3.3 billion of liquidity at September 30 and in a strong financial position with one of the best balance sheets in the business. With our focus on mining safe profitable ounces, our efforts to reduce costs through our O4E and invest sustaining capital into our existing mines where it makes sense to do so, given the current commodity environment, we will continue. We manage the business for the long term and with our financial strength, we can make prudent investment choices for today and for the future, when commodity prices rebound. With that, operator, I will turn it back over to you for questions.

[Operator Instructions]. The first question is from Andrew Quail of Goldman Sachs. Please go ahead.

First one is on sustaining CapEx. You've obviously, as you said, you're full all this projects which is great. Looking to 2016, do you have, I know you haven't given any guidance, but is there a level of sustaining CapEx that you will be targeting? Is that something reasonable around $800 million?

Andrew, we're in the midst of our budgeting process right now and it would be premature to give you any specific guidance. In the past, we've talked generally about $1 billion a year. Not just for sustaining, but for those other expansionary capital things that we spend money on, such as advancing the permitting at places like El Morro and the engineering work at Camino Rojo. Things like that. If you were thinking in terms of around $1 billion overall, that would probably make sense. But of course in a lower gold price environment, we look to find ways to bring those numbers down and that's what the budgeting process is all about right now and what we're going through. So we'll have those numbers for you early in the new year.

Right, at Cerro Negro, obviously it looks like it's almost at, pretty much at steady state. The grades have been very good the last three quarters. Do you expect that high-grade, we have said in the last two quarters pointed to Q4 and then maybe into 2016?

This is George. We're expecting to see further ramp up of Mariana Central and that's where the higher grade ore is at Cerro Negro. Right now, we're processing low grade stockpiles. Those are depleting and expected to be depleted around the beginning of the year and at the same time, we continue to see the underground mines ramp up. Mariana Central, as it continues to ramp up, those grades will increase.

The following question is from John Bridges of JPMorgan. Please go ahead.

Chuck, I'm sorry you seem to be everybody's favorite short this morning. On Cochenour, can you give us some indication as to what you're seeing down there? We understand the ore bodies is in different shape to what it was before, but does that mean that it's going to be similar levels of profitability once you get there or is it in a different configuration, such that profitability is going to be different?

There is really two parts to the deposit we're focused on. At the tram level, where we had the first access per drilling, that's where the orientation is a bit different. Our original scoping was long hold mining method. That's still intact. So from a cost perspective and profitability, we have the same expectations. The upper area which was the target for the acquisition to begin with, that's the heart of the deposit, we're getting great drilling results there and our focus next year, we'll be able to touch that part of the lower body and again be able to advance our earnings and planning around that development work. Overall, I would tell you our expectations haven't changed. It's just the timing.

You going to be ready to talk about that early next year?

As they come out with our guidance for the year and our production plans, we'll be giving everybody an update on Cochenour.

I'm curious, Hurricane Patricia t hit the West Coast of Mexico, it deluged Mexico and you seem to be on the track. Did you get a lot of rain? What you affected at all at Penasquito?

I will take that, John. We were all very focused on that and it was quite dangerous, because it was headed right toward Manzanillo where we have our concentrate warehouse and loading facilities. Fortunately, the hurricane turned at the last moment and missed Manzanillo and we had some very slight damage there and nothing that impacted our concentrate loading or any of the boats. There was actually a ship in Port at the time, being loaded. And then as the storm went through the rest of Mexico, yes, we got some more rain at Penasquito, but nothing that impacted us and it essentially missed Filos and El Sauzal.

Any rainfall feelers to dilute the solutions?

We've had the normal wet season at Filos and it continued with the storm, but nothing abnormal.

The following question is from Jorge Beristain of Deutsche Bank. Please go ahead.

It's actually Chris Terry. Two questions to close out on the D&A that Lindsay spoke about. Would you expect that next year's going to be at a similar run rate to the upgraded guidance to the end of 4Q? Is it going to be sometime before that then comes down with exploration success like you said? The second question maybe for Chuck, just more of a strategic nature. With the costs coming out of the industry and you've done a really good job at continuing to strip those out and generating free cash flow now, if we do see and you're right about the gold price starting to bottom out and we do see the price rise, where will you spend the marginal dollar from here? Is it on a combination of debt payback, new projects, dividends, more exploration spend? Or do you have a priority out of those that are listed?

I will take the first part of the DD&A, again we're getting our budgets together for 2016. I don't expect that to be higher. It will be lower because I don't anticipate impairments of stockpiles which is costing $10 or so an ounce. Also, we feel pretty good about replacement of reserves that will affect the denominator which should drive that number down. Generally speaking, it should be lower, but we're still working on that.

As far as how we manage increasing cash flow in a rising gold price environment, the one thing I can tell you that we're absolutely certain of is that we're not going to make the same mistakes that the industry made in the past cycle, where we lowered cutoff grades and chased top line growth at the detriment of margin growth and instead just allowed the cost to go up concurrent with goal price. That's not what our investors are looking for. They've made that very clear. Certainly, I've been around long enough to understand that. And so when we see the gold price move, we're going to be holding the line and focusing on increasing cash flow, rather than increasing revenues. And so how we spend that, it's always a combination. Certainly, there will be more exploration as our portfolio continues to be enhanced. We'll have more exploration to spend. We have organic projects already in the pipeline that we're very excited about, that we're working on. Things like HG Young at Red Lake, the metallurgical enhancement project down at Penasquito. We've got Camino Rojo, we've got El Morro, so we've got some great organic projects that we will continue to advance and the more cash flow we have, the more that we can bring those along.

The following question is from Greg Barnes of TD Securities. Please go ahead.

George, I want to get a feel for how you think the mining rate at Cerro Negro is going to trend over the next year or so, with the reserve or below-grade stockpiles gone, you're going to need to fill the mill. I'm wondering how that's going to happen.

As I stated, we're looking to continue to ramp up both underground mines. Eureka, we're headed to the 1800 ton a day sort of rate. Mariana Central is approaching 1,000 tons a day today and we're headed towards 1,500 ton a day. So we're expecting both of these mines to ramp up. Eureka is a pretty mature mine. Mariana Central is moving in that direction. We have some minor challenges with voids at Mariana Central that has impacted that ramp up, but we're getting through that. We're basically [indiscernible] the holes with plastic pipe, in order to be able to control the blasting. So we're pretty confident you're going to see those two ramp up. Then, longer-term it's about bringing the next mine into production. We be looking at Mariana Norte where that mine is already restarted as well as the exploration success we're seeing around the Mariana Central complex and all of that is in flux with our good exploration results and our planning for next year. So short-term, you're going to see both of these underground mines ramp up a bit and longer term, it's bringing new production into play.

Sounds like next year, you're going to be running around 3300 tons a day?

I would say we will be starting the year out around that rate and looking to ramp up further.

I want to return to Cochenour as well. I believe there was a plan there for production ramp up through 2016, but that seems to be changing. I'm just trying to get a sense of how you think production or mine output from Cochenour is going to go from here?

It's early days right now with Cochenour. Unfortunately, the lower part of the mine is going to ramp up a bit slower than we expected. As I stated, we're focus now on touching the heart of the deposit, the reason for the acquisition, next year and so trying to predict how quickly that will ramp up will be dependent upon that development, what we see. What I'd described you now, the ramp-up over the next couple of years has slowed down a bit but I think the endpoint is the same.

Should we expected bit weaker production at Red Lake as a whole for the next couple of years then?

We were looking for Cochenour to come on as Campbell ramped off. Obviously with a bit of a slower start, we'll be looking to keep their production as high as we can with the Red Lake Campbell complex. We're not going to see the ramp up next year. We had hoped just due to the delay, but I wouldn't be concerned next year's productions going to fall.

If I can add it's not just something that's material to even the Red Lake camp, let alone the overall production profile, because we only had a few thousand ounces in the plan for 2016, anyway. And now George and the guys are going to be focused very hard on getting that mine development done right, based on the different configuration that we've seen. We would certainly expect to see the production ramping up in late next year and into 2017. Remember, it's all about profitable ounces and that's what we're focused on. And while ounces are shorthand for performance in our business, we're trying to change that, frankly, in the way we talk internally about cash flow. And our cash flow will and is continuing to improve.

To put it realize it was only a few thousand ounces, if that's a talking about here it's not a big issue. That's helpful. Thanks.

The following question is from Patrick Chidley of HSBC. Please go ahead.

I wanted to ask a question about the change in working capital. Obviously you are healthy with the cash flow. Can you give us an idea of how that's going to be going forward? Have you gotten any plans to continue that trend or is it one quarter it will be positive, one quarter negative?

Patrick, we're always trying to reduce our working capital, but we've had two great quarters and we see it continuing for a while. At the end, it's timing of cash flows and a couple of things, the timing of say when you pay the taxes or you get refunds. In our case too, to a large extent is, did the ship leave the warehouse on time and am I going to get paid for it? That's the concentrate out of Penasquito. Some of those things, predominantly those two things, will always impact working capital and we always focus on reducing that amount, but I can't always guarantee that it will be positive, but it's been strong for the last two or three quarters and we see that continuing. But again, sometime in 2016 you'll have a negative working capital as those cash flows don't come in on a quarterly basis as anticipated or change over the quarterly basis. That's what working capital is supposed to do. We focus on it.

The cash level $257 million is pretty low it seems to me. If something went wrong in the fourth quarter to the cash flow, would you have to go back into the revolver for the plan?

$257 million is a reasonable amount to run the business on. I don't think it would be -- going to the revolver in order to counteract I think that you're surmising as $300 million of cash isn't enough to run the Company. That wouldn't be the case. It's a luxury to have the revolver there undrawn and we don't anticipate using in the fourth quarter, if that's what you're asking.

I can just tell you that we're a month into the fourth quarter and we know what our business is doing and we wouldn't have paid down the revolver if we thought that we would have to dip back into it in the fourth quarter. We're pretty comfortable with where we're.

Did I hear George say that he feels good about reserve replacement this year?

That's correct. We're wrapping up all our drilling programs and in the engineering phase, but we remain confident we're going to have a good year and replace reserves.

That's regardless of whether the gold price you choose is slightly lower or whatever. Is that factored in as well?

We're expecting a likelihood we will lower gold price and we're factoring that into our confidence we will replace reserves.

What sort of target are you looking for from the Borden project? I know that you're aiming to actually convert some of that into reserves by the end of the year.

We're expecting reserves. The details of that will come out early in the new year, but I'm confident we will have reserves there.

Remember Patrick, it's about a 2 million ounce resource and will have an initial reserve there, but you need to give us some time to chew through that and get the definition drilling done. Don't expect the entire resource to convert in the first year.

The following question is from David Haughton of CIBC.

Perhaps to George, back to Cochenour again I'm afraid. Thinking about this orientation issue, can you explain it in words? Are we talking here about the depth, the strike, the plunge, the geometry, continuity? What is it exactly?

It's predominantly the strike. Geologic interpretation and strike of the mineralized zone is what's changed. As a result of that, we're doing more advanced expiration and development work to support a clear understanding, so we get the development right.

Ore body extending in a direction other than what you had previously anticipated, I guess it does a result in drilling in a different place to what you had encountered before. Is this more for the step out drilling rig that you're looking at?

Not really, it's the orientation of the mineralized zone. We had essentially drill intercepts and we interpreted the azimuth in connection with those various mineralized zones that were at economic rates. As we got into do the development, we're finding it's a bit more complex and the orientation is different than the geologists had projected, so we're making those adjustments and then confirming them with additional drilling and development.

Are you encountering then any pinching or swelling or is there any difference along strike? Do you end up with multiple stacked areas of mineralization?

We assume there would be multiple stacked mineralization zones and I guess the way I would describe, some of that is true, in other areas we're seeing wider and different orientation then was projected. It's probably a mix of both. Again, in the end, down in this bottom area, we're still confident we've got economic zones and we're a bit delayed in getting those initial stopes, but they will come. I would probably turn you more to the upper area, where the bulk of the ounces are, the higher grades are and frankly, the larger profit for this deposit is going to come. And as we've advanced development of this mine, that's our biggest focus for next year, as we're drilling on that now and our development will be focused on touching that part of the ore body and again understanding it well enough we get the infrastructure in the right place.

This orientation issue is only at depth and not in the bulk of the ore body that you'll be accessing?

Yes, that's the way we understand today. It's just down at the bottom near the tram level.

David, if I can just add from an non-technical perspective, as we got in and saw this different orientation then we had interpreted, it just didn't make sense to continue with the development work and put all these headings in and then find they're in the wrong place and have to redo them. We want to get the first production from Cochenour. It's important, but it's not so critical that we were going to risk all that development and then find that we had to do it differently. So we step back. We stop. We put some more drill stations in, coming in at different angles, so that we can understand it better and trying to be fairly conservative in what we're telling you because of that we backed off on giving you a date certain for first ounces or a number of ounces. And as we complete the budgeting and we're doing all this work and we talked to you at the beginning of next year with our expectations for 2016, we'll have more information for you there.

Yes. It will be quite helpful to visualize it, but I presume that some of the development that you're referring to would be not the development for ore extraction in the near term, it's a longer-term if it's more at depth that you've got the uncertainty of the orientation?

The key is getting the ramp in the right place and from the ramp goes the sill development. We've got to get this orientation right so that we get the ramp ideally situated to minimize lateral development and that's a key to keeping the costs down and the profitability up.

The following question is from Andrew Kaip of BMO Capital Markets. Please go ahead.

I'm going to continue on David's theme and just to confirm, ramp development towards the upper portion of the Cochenour deposit has yet to be initiated because you still trying to work out the -- where the best place to place that ramp is?

There is the connection between a shaft and the tram, that's now complete. So we have that in place. That was a key to ventilation, secondary egress. Then there's additional ramping required to set up production stoping and level development. The advanced exploration we're doing today is in order to get the ramping and ore passes and waste passes in the right location, given the orientation. So in the lower part that we have now touched and we did some preliminary sill development, that's what we're doing the advanced exploration so that we get all of the future ramp development and sill development in the right place. In the upper area or the heart of the deposit, we haven't touched the ore body there, we haven't done lateral and ramp development of the main infrastructure between the shaft and the tram. So again, we're drilling today and we'll do the initial touching of that ore body next year and from there, as the information increases, be able to get that ramp and sill development in the right place.

The upper part of the deposit, you'll access that via the shaft rather than ramp development from the haulage level?

The design of Cochenour, the shift was really put in place to give ventilation and secondary egress. We don't have plans to hoist material. All ore from Cochenour will be dropped down through ore passes to the tram level, brought across by rail on the tram over to the Red Lake complex and hoisted with existing shift. So the Cochenour shaft is really about ventilation and helped in the development connecting the tram and the shaft, but again, it's not going to be for material movement.

And just regarding the HG Young zone, you're currently advancing an exploration access. Can you give us a sense of when you'll be at that zone and when you'll be able to actually physically be able to look at it and see whether your ideas about what it looks like?

The bulk of the drilling to date had been from surface and we've got a high grade nice zone that we've been chasing to depth. And so right now, we're doing development from the 14 level that has set us up to be able to drill at the 14 level from underground drilling. As we get that drilling completed and as part of our budget process, we're working on accessing and touching the HG Young. The likely place will be at the 14 level. That's where we're closest to this new discovery. But we're assessing other alternatives over the long haul. Ramp from surface, development from 7 level and ultimately how we develop HG Young will be dependent on the continued exploration success. Right now, I tell you 14 level is the likely place we first touch to start confirming in the ground what we're seeing in the drill bit.

And just switching regions, Los Filos seems to be cluster high in the quarter from an all-in sustaining cost basis. Noticed the grade has been inching up of the last couple of quarters. You're doing some study work. Can you give us a better sense of how you see Los Filos moving into 2016? Clearly its cross structure needs to come down.

The first thing I'd point you to, it was a tough quarter, but that write-down played a big impact. It was about $400 an ounce on the costs, you're seeing all-in sustaining costs. That's a one-time hit that's a result of lower metal prices in the earlier write-down. In terms of our focus and we're focused very hard on getting the costs down at Los Filos and there's impacts there just cost focus. The other is inventory reductions. We've seen good progress the first couple of quarters, in the third quarter it wasn't as good as the first two quarters, partially due to the normal wet season at Filos this time of year. And the other thing I'd point you to is, we're focused on injection drilling, in order to get cyanide into some areas of the pad that we've seen through geophysical work are dry. So we expect to get recovery out of those zones and again, pull down the inventory and drive our own sustaining costs down.

How sensitive were those, that material, that inventory that was written down? Is it something that is highly price-sensitive and could potentially, with slightly higher metal prices, come back into your inventory?

We essentially, prior quarter, had written it down to current metal prices. Essentially those ounces were written to break even at the metal price in the second quarter. As the price dropped, that forced another write-down. Essentially, if the metal price goes up, then yes, we've got margin again.

That metal price would have to be above $1,200 it sounds like?

Andrew, it's Lindsay. I think it's priced around, more closer to $1100, so anything north of $1100 will start generating margin of those ounces as they come out of the leach path.

Finally, Cerro Negro, it looks like just based on your run rate through the first three quarters, you're actually going to exceed your guidance there. I'm wondering, you didn't point that out in the quarter and is the reservation to do that predicated on negotiations that are ongoing with the unions? Or is it just the fact that the inventory, the stockpile, the low-grade stockpile will be declining and will probably see production or processing rates move down through the fourth quarter?

No. We're expecting processing rates to continue and you're right. Cerro Negro has had a great three quarters. It has a good likelihood of pushing through the top end of the guidance. I'd tell you the only risk would be a union stoppage, but I think that's a very remote risk.

If I can just add Andrew, we did have a four day stoppage and guidance is an art as much as anything else and one of the things we've thought about and talked about there was, we're still in the midst of negotiations, so let's just leave it where it is and we'll hopefully make it through the quarter and have a good quarter.

What's the chief sticking point, I guess, is the best way to put it?

Like any labor negotiation, it's a private discussion and we're not going to get into the details of those discussions.

The following question is from Anita Soni of Credit Suisse. Please go ahead.

I'll try and be brief here. Just on Cerro Negro, the silver grades coming in pretty from I think Mariana Central and Eureka. Do you expect that to continue into the remainder of the year?

Can you speak up a little bit, Anita? I'm not sure we got it all.

I was trying to get color on the silver grades at Mariana Central. They seem to be coming out higher than I guess I had anticipated post-tour.

They were a bit higher this quarter, I wouldn't say that level will continue, probably somewhere between September quarter end and the first couple of quarters.

Going back to Red Lake and the Cochenour, can you remind us where you are in the de-stress lots and sequencing and things like that? I assume with Cochenour ounces delayed until later in the year and even though they are nominal ounces, you are going to start focusing on basically getting those tons out of the Red Lake complex, if you can. I just wanted a refresher course on where we're on the high grade zone and the de-stress.

So that we're well underway with that de-stress lot. We've got more than half of it pulled and the rest of it set up, so we're pretty good shape to complete that in the fourth quarter.

That sets you up for 2016?

Yes. It sets us up for Q4 and 2016, yes.

The following question is from Tanya Jakusconek of Scotiabank

I wanted to come back. Anita asked the question on the Red Lake. I wanted to make sure we were back into that higher grade stope for Q4 and then for 2016, that's taking care of that question. Maybe just to come back to Cochenour and I don't want to beat this over again. George, can you remind us the top zone and the lower zone? What proportion of the ounces fit in the top area and what fits in the bottom?

The bottom zone, essentially were projections with some drill results from the top zone. The reason why we went after Gold Eagle deposit, I would just tell you the vast majority is in the upper zone, it was and remains so. The only reason we developed the lower area which is not the heart of this deposit, was simply that was the first place we had access to drill.

When you say vast majority, is that over 90%? I'm just trying to get a feel.

More than two thirds.

Tanya, we don't have the breakdown of the resource here. Because there was much more drilling in the upper part, that's where the bulk of that 3.4X million ounce resource is today.

I was just trying to get an idea from, if we could and we can take it offline, what it says that the percentage from the upper zone and lower and also grades, just to be reminded on that basis.

Sure. Just remember it's an inferred resource. That's why we're doing the drilling now to fill that all in.

No, no, no, I understand. Maybe just to move off onto reserves, you mentioned that you are looking to a place reserves this year and maybe George, just to remind us what $100 per ounce movement in the gold price does to your reserve base? Number-one and then Cerro Negro and Borden were two that you highlighted as adding to reserves this year. Maybe any other mines or projects that you think could add to the reserve base?

While George looks that up as far as the numbers, I think he highlighted or he didn't, I highlighted that Eleonore also, we expect to more than replace reserves. Much like we did last year. We continue to have good success drilling that deposit as we get deeper. He's looking up now what the $100 an ounce meant last year. Remember, that was based on last year's reserve. Now we're recalculating them down at the $1,200 level.

Just to get an idea from $1,300 to $1,200 what it does. Just Borden, Eleonore and Cerro Negro are what comes to mind?

Those are the big movers. On the issue of lower metal price. We're favorably sitting in jurisdictions where FX rate is offsetting. If you assume a $100 drop in gold price, there is really no impact on us overall, due to the exchange rate in Mexico and Canada predominantly.

Thank you, Tanya and I think that's the last of our questions, operator?

Yes, that concludes the question and answer session.

Thank you, everyone. Appreciate you joining us on the call today. I know you have a lot to do with a lot of companies reporting. To summarize, I would say that as planned, we've got increasing production, lower costs and a sound balance sheet and certainly delivering that strong free cash flow well in excess of our dividends. We remain on track to continue those trends in the fourth quarter and into next year, even in the current gold price environment. We look forward to a strong finish to the year and updating you on our progress in the New Year. Thank you.

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