Third of Goldcorp (TSE:G) Cashflow to Come From Mexico

About a third of future cashflow for Goldcorp (TSE:G) (NYSE:GG) is projected to come from Mexico, which is ramping up its latest project in Mexico, the Penasquito mine, in the third quarter.

Goldcorp invested about $1.7 billion in the project, which is expected to produce close to 1 million gold equivalent ounces a year for the company.

By the early part of 2011, the company should be working 130,000 tons a day.

Penasquito will match the largest existing gold project of Goldcorp, their Red Lake project in Ontario, which includes the expansion they're doing there over the next two years.

Investors are excited about Goldcorp because of their growth profile, which is estimated to bring up to 2.6 million ounces of gold in 2010, at a cash cost of $350 an ounce, an increase from the 2.4 million ounces produced in 2009 at $295 an ounce.

For the next five years the company is projecting a 50 percent increase in production, based for the most part on the Penasquito project, although they have other mines scheduled to come on line, like the Pueblo Viejo in the Dominican Republic, where gold production should launch in 2011, and estimates of 400,000 ounces of gold produced in the first five years.

Rising costs have put some pressure on margins and earnings, but the company still looks very solid, and with gold prices sure to continue rising, that'll be largely widened.

Costs have come under better control at Goldcorp and the gold mining industry in general, as energy and equipment costs has risen in response to growing demand.

Going forward, analysts are looking for profits for the year to grow 46 percent over 2009, to $1.17 a share, and another 41 percent in 2011.