Goldcorp reported in late January 2012 that the company and the government of Guatemala had reached an agreement whereby royalties paid on precious metals production from Goldcorp’s Marlin mine will increase from 1% to 4% of gross revenue. The additional royalties will be calculated, paid and distributed in the same manner as the royalty mandated by Guatemala’s Mining Law, including a stipulation that 50% of the total royalty will be paid directly to the municipality in which the extraction of the mineral occurs.

Marlin also agreed to pay an additional 1% voluntary royalty, with 80% of this additional royalty to be used to implement the economic development plans of the municipalities of San Miguel Ixtahuacán and Sipacapa. The remaining 20% will be paid to the Ministry of Energy and Mines and the Ministry of Environment and Natural Resources to be used to develop the institutional capacity of those ministries.

The royalties are in addition to the income tax of 5% of gross revenues and other wage and value added taxes paid by the company. In 2011, Goldcorp paid approximately $86 million in taxes and royalties in Guatemala. Approximately $96 million in supplies were purchased in the country, including $5 million from companies located in San Miguel Ixtahuacán and Sipacapa. The Marlin mine currently employs 2,241 people, 97% of whom are Guatemalan.

The Marlin mine is located in the western highlands of Guatemala approximately 300 km north of Guatemala City. Production was from a combined open-pit-underground operation through the end of 2011, when open-pit mining was completed and production transitioned to exclusively underground. The mine had a strong year in 2011, producing 382,000 oz of gold as mining in the higher-grade portion of the open-pit was completed. Production during 2012 is estimated at 210,000 oz. Proven and probable gold reserves at year-end 2011 totaled 1.25 million oz. Proven and probable silver reserves totaled 53.49 million oz.