Why You Should Consider Investing in Goldcorp Inc. and Yamana Gold Inc.

Goldcorp Inc. (TSX:G) (NYSE:GG) and Yamana Gold Inc. (TSX:YRI) (NYSE:AUY) have promising projects to drive future returns for income investors.

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The Motley Fool

Goldcorp Inc. (TSX: G)(NYSE: GG) and Yamana Gold Inc. (TSX: YRI)(NYSE: AUY) have quality projects in place that offer potential future returns for their respective shareholders.

Here’s a look at the top projects for each company and why they deserve consideration for your portfolio of dividend-paying stocks.

1. Goldcorp Inc.

The top-producing mine for Goldcorp Inc. is the Red Lake mine in Red Lake, Ontario. For Q2 2014, Red Lake gold production was 89,500 ounces and the expectation is that production will increase in the second half of this year as more opportunities become available. Red Lake produced 493,000 ounces in 2013. The estimated mine life of Red Lake is 12 years and the High Grade Zone is the mainstay of the operation (average grade of over two ounces of gold per tonne).

A high-grade gold mine, the Cerro Negro project in Argentina is Goldcorp’s newest mine. Initial gold production began at Cerro Negro on July 25, 2014. Goldcorp expects commercial production in Q4 2014. The expectation is that production for 2014 will be between 130,000 and 180,000 gold ounces. Goldcorp anticipates that Cerro Negro will be a long-lived, high-quality asset with low production costs.

The Éléonore project in Quebec is one of the company’s major projects. It is a vital element in Goldcorp’s next generation of growth projects. Éléonore is targeted for first gold in Q4. Commercial production is on schedule for Q1 2015. A 2011 pre-feasibility study update for this project calls for low-cost gold production. Goldcorp believes that the Éléonore project will be a major producer. It foresees annual production of approximately 600,000 ounces upon full ramp-up of the project.

2. Yamana Gold Inc.

An example of a quality Yamana Gold Inc. project is its flagship precious metal mine, the El Peñón project in Chile. This mine is a high-grade underground gold-silver mine. It exceeded the company’s expectations in 2013. It produced close to 470,000 gold equivalent ounces. Exploration at El Peñón has been taking place for 20 years and continues on. Many drill targets at this project returned positive results in Q2 2014.

Another quality producing mine for Yamana Gold is the Mercedes gold-silver underground mine in Mexico. Yamana Gold owns this project 100%. Production for 2013 at Mercedes was 141,618 gold equivalent ounces. The company expects production to increase more in the coming years. This is as development of the mine fast tracks and as Yamana introduces plant modifications. The mine life is eight years and Mineral Reserves and Mineral Resources (as at December 31, 2013) are: gold — 845,000 oz. proven and probable and 357,000 oz. measured and indicated, with silver at 8.4 million oz. proven and probable and 4.4 million oz. measured and indicated.

This past June, Yamana Gold and Agnico Eagle Mines Limited acquired Osisko Mining Corp and with this acquisition acquired the Canadian Malartic Mine. The two companies subsequently established the Canadian Malartic Partnership. The Canadian Malartic Mine is the largest gold mine in Canada. The expectation is that this mine will produce between 510,000 to 530,000 ounces this year. In August, Yamana announced the filing of the Technical Report for the Canadian Malartic Mine.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no position in any stocks mentioned.

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