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By Craig Wong
16 May 2006 at 04:27 PM EDT

VANCOUVER (CP) -- Goldcorp Inc. [TSX:G; NYSE:GG] chief executive Ian Telfer sees his company's annual gold production growing to between 2.5 million and three million ounces over the next five years and developing at least two new mines.

'We expect that our share of production from them would be between 250,000 and 400,000 (ounces) from each one of these kinds of developments,' Telfer told a conference call with analysts Tuesday when asked of his ideal vision for the company.

Telfer said he does not want to compete directly with gold heavyweights such as Barrick Gold Corp. [TSX:ABX, NYSE:ABX] or Newmont Mining Corp. [NYSE:NEM], but would rather remain a low-cost producer.

'We don't think we want to grow to the sky,' he said.

The company is expected to produce 1.7 million ounces of gold in 2006.

Goldcorp has bulked up with the takeover of Wheaton River Minerals Ltd. last year and the addition of several former Placer Dome mines earlier this year, including the Campbell mine which is adjacent to Goldcorp's existing Red Lake operation in Ontario.

Telfer said the company hopes to build an underground passageway from the Red Lake mine connecting it to the Campbell mine later this year.

'The area has been waiting for years to have these two ore bodies put together,' he said.

Among the projects Goldcorp is looking to develop in the coming years is Virginia Gold Mine's Eleonore gold project in Quebec that the company acquired the rights to in a $445-million deal.

'I would say the Virginia one will certainly get built during that period of time, but my guess there will be a couple more in some sort of process during that period,' Telfer said.

Goldcorp, which has not hedged or forward sold its gold production, has been riding near record gold prices in recent months.

The June contract for gold rose $7.90 US to settle at $692.90 an ounce Tuesday on the New York Mercantile Exchange.

The gold miner, which reports in U.S. dollars, said Monday it earned $92.4 million or 24 cents per diluted share on revenue of $286.3 million for the quarter ended March 31. That amounted to $29.5 million or 11 cents per diluted share on revenue of $122.8 million in the comparable period in 2005.

Quarterly gold production increased to 295,100 ounces from 275,400 ounces in 2005, the company reported. Gold sales were 288,400 ounces from 217,500 ounces in the prior-year period.

In its outlook, Goldcorp expected expenditures for mining interests for the remainder of the year to be about $230 million, mainly related to an expansion at Red Lake expansion and the completion of the construction at the Los Filos mine in Mexico.

UBS analyst Tony Lesiak wrote in a note to clients, the operating performance was 'modestly below expectations' due to a slower than expected ramp up at the Amapari in Brazil, higher costs at Red Lake in Ontario and an inventory build up at Alumbrera in Argentina.

Lesiak maintained a 'Buy 2' rating on the company with a $46 US price target.

Goldcorp has operations in Canada, Argentina, Mexico, Brazil, Australia and the United States, and also owns a 62% interest in Silver Wheaton Corp. [TSX:SLW; NYSE:SLW].

Shares in the Vancouver company were down 88 cents at C$36.73 in Tuesday trading on the Toronto Stock Exchange.

© The Canadian Press 2006

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