Red Lake mine reserves "rich". (Special Report: Mining).

Red Lake is home to the richest gold mine in the world. This richness has turned its owner, Goldcorp Inc. of Toronto into one of fastest growing, lowest cost, most profitable gold companies in the world.

"After costs, our Red Lake gold mine is generating $200,000 (US) per day in net free cash," says Chris Bradbrook, vice-president, corporate development. The company is debt free and was fortunate in not having to sell its gold forward with hedging contracts. The Red Lake mine began commercial production on Jan. 1, 2001.

"The richness of the Red Lake property is allowing Goldcorp to increase shareowner wealth in both low and high gold price environments," Bradbrook says. It is also permitting the company to intensify and bring innovation to gold exploration.

This good fortune is opposite to the situation facing nearly all North American gold producers. Most are scrambling to maintain profitability or ease losses. They are slashing exploration budgets to preserve capital.

Goldcorp began in 1989 when Robert McEwen bought control of two gold mining companies. In 1990 he changed the boards of directors of both companies, hired a new management team and became senior officer of both companies. In 1994 McEwen merged four companies to create Goldcorp Inc.

In addition to its high-grade Red Lake mine, Goldcorp owns a South Dakota gold mine and an industrial mineral operation in Saskatchewan.

In March 2000 Goldcorp moved far beyond the conventional thinking of the gold mining industry and launched the "Goldcorp Challenge." In an unprecedented move, it posted all of its available geological data for the Red Lake property on a corporate Web site. The company announced it was exploring for more significant high-grade zones at Red Lake and challenged the global community to help discover the next six million ounces of gold. It also announced that the winners had a chance to share in a $500,000 (US) reward.

"In four months we had 400,000 hits on our Web site," says Bradbrook, "and Forbes Magazine identified us as having one of the top Web sites in North America." More than 1,400 individuals, teams and organizations registered from 56 countries and 50 submitted proposals before the deadline.

"It was like getting 50 consultants working on our property for free," Bradbrook says.

The process generated 100 exploration targets, 50 that were brand new and 50 that had previously been identified. The winner of the first prize was an Australian team that "submitted three-dimensional software with its proposal that has proved to be of great value to Goldcorp," Bradbrook says.

Goldcorp announced a new challenge on March 12, 2001. The $2-million (US) "Global Search Challenge is designed to identify, assist and promote the talented individuals and organizations with best probability of discovering important mineral deposits in the 21st century."

Goldcorp announced its year-end gold reserves and resource estimates on Feb. 7, 2002. Proven probable high-grade gold reserves at Red Lake are estimated to be 1.85 million tons, at a grade of 2.05 ounces per ton, for a total gold content of 3.8 million ounces.

High-grade resources at the Red Lake mine are estimated to be 484,000 tons at a grade of 2.84 ounces per ton, for a total gold content of 1.4 million ounces. After extracting a total of 535,000 ounces during 2001, total high-grade reserves and resources are estimated to be 5.2 million ounces.

A priority in 2002 will be to establish underground access to facilitate more exploration of the high-grade zone at depth, with the goal of a more substantial increase in the reserves and resources of this high-grade mineralization.