Goldcorp Inc.
TSX : G
NYSE : GG

Goldcorp Inc.

August 10, 2006 16:22 ET

Goldcorp Inc.: Second Quarter Earnings Nearly Doubled to $190 Million from Q2 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 10, 2006) - (All figures are in US dollars unless stated otherwise) -

GOLDCORP INC. (TSX:G)(NYSE:GG) is pleased to announce its second quarter results, highlights of which are:

- Net earnings nearly doubled to $190.4 million ($0.50 per share), compared with $98.0 million ($0.30 per share) in 2005. Adjusted for certain non-cash items(1)(2), net earnings amounted to $136.9 million ($0.36 per share) for the quarter.

- Operating cash flows increased 46% to $240.1 million ($0.63 per share), compared with $163.9 million ($0.50 per share) in 2005(2).

- On May 12, 2006, Goldcorp closed on the agreement with Barrick Gold Corporation to acquire Placer Dome Inc's ("Placer Dome") Canadian operations and other assets for cash of approximately $1.6 billion. These operations are included in Goldcorp's operating results for the period from May 12, 2006 to June 30, 2006.

- Gold production increased 35% to 378,500 ounces, compared with 281,000 ounces in 2005.

- Gold sales were 398,700 ounces, compared with 267,400 ounces in 2005, excluding second quarter 2005 gold sales of 275,700 ounces in gold bullion inventory.

- Total cash costs were minus $123 per ounce (net of by-product copper and silver credits) (2005, $52 per ounce)(2).

- On June 9, 2006, Goldcorp closed on the early warrant exercise transaction. Proceeds received during the quarter were approximately $455 million, which were subsequently used to repay credit facilities drawn down to fund the acquisition of Placer Dome assets.

(1) Non-cash items include $61 million related to the dilution gain realized on the Silver Wheaton C$200 million public offering to non-controlling interests and $7.6 million, net of tax, non-hedge derivative losses.

(2) The Company has included certain non-GAAP performance measures throughout this document.

For the six months to June 30, 2006, net earnings increased to $282.8 million ($0.78 per share), adjusted for certain non-cash items, net earnings amounted to $229.3 million ($0.63 per share), compared with $127.5 million ($0.44 per share) in 2005. Operating cash flows increased to $314.5 million ($0.87 per share), compared with $244.1 million ($0.84 per share) in 2005. Gold production totaled 673,600 ounces in 2006 compared with 556,400 ounces in 2005. Gold sales increased to 687,100 ounces at a total cash cost of minus $108 per ounce, compared with 484,900 ounces, excluding gold sales of 275,700 ounces in gold bullion inventory, at a total cash cost of $64 per ounce in 2005.

Ian Telfer, President and Chief Executive Officer of Goldcorp, said, "Goldcorp's strong quarterly results are indicative of the Company's ability to increase gold production, deliver solid earnings and cash flows and remain as one of the lowest cash cost producers in the industry. The integration of the recently acquired operations is proceeding smoothly and synergy optimization plans are in progress. We will continue our aggressive plans to create value for shareholders through strategic acquisitions and capital investments that enhance our long-term production profile."

A conference call will be held Thursday, August 10th at 5:00 p.m. (ET) to discuss these results. You may join the call by dialing toll free 1-877-888-3855, or for calls from outside Canada and the U.S. dial (416) 695-6622.

You can listen to a recorded playback of the call after the event until September 10th by dialing 1-888-509-0081 or (416) 695-5275. A live and archived audio webcast will also be available at www.goldcorp.com.

Goldcorp is one of the world's lowest cost and fastest growing multi-million ounce gold producers with operations throughout the Americas and Australia. Gold production in 2006 is expected to approximate 1.8 million ounces on an annualized basis, at a total cash cost of less than $100 per ounce. In the second half of 2006, production is expected to be 950,000 ounces. The Company does not hedge its gold production.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver and copper, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver and copper; possible variations in ore reserves, grade or recovery
rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in Goldcorp's annual information form for the year ended December 31, 2005, available on SEDAR at www.sedar.com, and Form 40-F for the year ended December 31, 2005 on file with the United States Securities and Exchange Commission in Washington, D.C. Although Goldcorp has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

(in United States dollars, tabular amounts in thousands, except where noted - Unaudited)

Management's Discussion and Analysis

of Financial Condition and Results of Operations

Three and Six Months Ended June 30, 2006

This Management's Discussion and Analysis should be read in conjunction with Goldcorp's unaudited interim consolidated financial statements for the three and six months ended June 30, 2006, and related notes thereto which have been prepared in accordance with Canadian generally accepted accounting principles. In addition, the following should be read in conjunction with the 2005 audited consolidated financial statements, the related annual Management's Discussion and Analysis, and Annual Information Form/40-F on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities. This Management's Discussion and Analysis contains "forward-looking" statements that are subject to risk factors set out in the cautionary note contained herein. This Management's Discussion and Analysis has been prepared as of August 10, 2006.

SECOND QUARTER HIGHLIGHTS

- Net earnings nearly doubled to $190.4 million ($0.50 per share), compared with $98.0 million ($0.30 per share) in 2005. Adjusted for certain non-cash items(1), net earnings amounted to $136.9 million ($0.36 per share) for the quarter.

- Operating cash flows increased 46% to $240.1 million ($0.63 per share), compared with $163.9 million ($0.50 per share) in 2005.

- On May 12, 2006, Goldcorp closed on the agreement with Barrick Gold Corporation ("Barrick") to acquire Placer Dome Inc.'s ("Placer Dome's") Canadian operations and other assets for cash of approximately $1.6 billion. These operations are included in Goldcorp's operating results for the period from May 12, 2006 to June 30, 2006.

- Gold production increased 35% to 378,500 ounces, compared with 281,000 ounces in 2005.

- Gold sales were 398,700 ounces, compared with 267,400 ounces in 2005, excluding second quarter 2005 gold sales of 275,700 ounces of gold bullion inventory.

- Total cash costs were minus $123 per ounce (net of by-product copper and silver credits) (2005: $52 per ounce)(2).

- Dividends paid during the quarter of $17.4 million.

- On June 9, 2006, Goldcorp closed on the early warrant exercise transaction. Proceeds received during the quarter were approximately $455 million, which were subsequently used to repay credit facilities drawn down to fund the acquisition of Placer Dome assets.

(1) Non-cash items include $61 million related to the dilution gain realized on the Silver Wheaton C$200 million public offering to non-controlling interests and $7.6 million, net of tax, non-hedge derivative losses.

(2) The Company has included a non-GAAP performance measure, total cash cost per gold ounce, throughout this document. The Company reports total cash costs on a sales basis. In the gold mining industry, this is a common performance measure but does not have any standardized meaning prescribed by GAAP, and is a non-GAAP measure. The Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

OVERVIEW

Goldcorp is a leading gold producer engaged in gold mining and related activities including exploration, extraction, processing and reclamation. The Company's assets are comprised of the Red Lake, Porcupine (51% interest) and Musselwhite (68% interest) gold mines in Canada, the Alumbrera gold/copper mine (37.5% interest) in Argentina, the Luismin gold/silver mines in Mexico, the Amapari gold mine in Brazil, the La Coipa gold/silver mine (50% interest) in Chile, the Peak gold mine in Australia and the Wharf gold mine in the United States. Significant development projects include the expansion of the existing Red Lake mine, the Los Filos gold project in Mexico, the Eleonore gold project in Canada, and the Pueblo Viejo (40% interest) in the Dominican Republic. Goldcorp also owns a 57% interest in Silver Wheaton Corp. ("Silver Wheaton"), a publicly traded silver mining company.

Goldcorp is listed on the New York Stock Exchange (symbol: GG) and the Toronto Stock Exchange (symbol: G). In addition, the Company has share purchase warrants which trade on the Toronto Stock Exchange and on the New York Stock Exchange.

Goldcorp's strategy is to provide its shareholders with superior returns from high quality assets. Goldcorp has a strong and liquid balance sheet, and has not hedged or sold forward any of its future gold production.

Goldcorp is one of the world's lowest cost and fastest growing multi-million ounce gold producers with operations throughout the Americas and Australia. Gold production in 2006 is expected to approximate 1.8 million ounces on an annualized basis, at a total cash cost of less than $100 per ounce. In the second half of 2006, production is expected to be 950,000 ounces.

ACQUISITION OF CERTAIN PLACER DOME MINING ASSETS

On October 30, 2005, Goldcorp entered into an agreement with Barrick to acquire certain of Placer Dome's Canadian and other mining assets and interests upon Barrick's successful acquisition of Placer Dome. On March 15, 2006, Barrick acquired 100% of the outstanding shares of Placer Dome for approximately $10 billion in shares and cash. On May 12, 2006, Goldcorp completed the agreement with Barrick for cash of approximately $1.6 billion. The acquisition was funded with a $250 million advance payment paid in January 2006 from cash on hand. The remainder was paid upon closing by drawing down on credit facilities in the amount of $1.3 billion and cash on hand. On June 9, 2006, Goldcorp closed on the early warrant exercise transaction. Proceeds received during the quarter were approximately $455 million, which were subsequently used to repay credit facilities drawn down to fund the acquisition of Placer Dome assets. Goldcorp has acquired interests in the Campbell (100%), Porcupine (51%) and Musselwhite (68%) gold mines in Canada, and the La Coipa (50%) gold/silver mine in Chile. Goldcorp also acquired a 40% interest in the Pueblo Viejo gold development project in the Dominican Republic, together with Placer Dome's interest in its Canadian exploration properties, including the Mount Milligan copper/gold deposit in British Columbia. On July 24, 2006, Goldcorp completed the previously announced sale of Mount Milligan and certain other Canadian exploration interests to Terrane Metals Corp. ("Terrane", formerly Atlas Cromwell Ltd.) for 240 million convertible preferred shares of Terrane at a deemed price of C$o.50 per share. The preferred shares are convertible into common shares of Terrane at the option of Goldcorp at any time without any further consideration. On an as-converted basis, Goldcorp would own an approximate 81% equity interest in Terrane's issued and outstanding shares and an approximate 75% on a fully diluted basis.

Upon Barrick gaining control of Placer Dome on January 19, 2006, Goldcorp initiated its integration plan which includes the combination of the Red Lake and Campbell complexes. The integration process of the Placer Dome mines is well underway which will allow the Company to maximize on synergies and create significant shareholder value.

This business combination has been accounted for as a purchase transaction, with Goldcorp being identified as the acquirer. The results of operations of the acquired assets are included in the consolidated financial statements of Goldcorp from the date of acquisition, May 12, 2006.

The purchase consideration has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed, with goodwill assigned to a specific reporting unit, based on management's best estimates and taking into account all available information at the time these interim consolidated financial statements were prepared. Goldcorp will continue to review information and perform further analysis with respect to each of the Placer Dome assets, including an independent valuation, prior to finalizing the allocation of the purchase price. This process will be performed in accordance with the recent accounting pronouncement relating to "Mining Assets - Impairment and Business Combination" (Emerging Issue Committee Abstract 152). Although the results of this review are presently unknown, it is anticipated that it may result in a change to the amount assigned to goodwill and a change to the value attributable to tangible assets.

ACQUISITION OF VIRGINIA GOLD MINES

In December 2005, the Company announced that it had entered into an agreement with Virginia Gold Mines Inc. ("Virginia") to acquire Virginia's Eleonore gold project in Quebec, Canada pursuant to a plan of arrangement involving Virginia. Under the agreement, shareholders of Virginia received 0.4 of a Goldcorp common share and 0.5 of a share in a new public exploration company ("New Virginia") for each issued and outstanding Virginia share. On March 31, 2006, Goldcorp completed the acquisition of Virginia and retained the Eleonore gold project. New Virginia holds all other assets of Virginia, including net working capital, cash received prior to closing on the exercise of Virginia options and warrants, its non-Eleonore assets and a sliding scale 2% net smelter return royalty on the Eleonore project. On March 31, 2006, Goldcorp issued 19.3 million common shares, and warrants, pursuant to the transaction valued at total consideration of $406 million.

ACQUISITION OF WHEATON RIVER MINERALS LTD.

In December 2004, Goldcorp and Wheaton announced a take-over bid by Goldcorp for Wheaton on the basis of one Goldcorp share for every four Wheaton shares. On February 14, 2005, the minimum two-thirds bid requirement under the terms of the Goldcorp offer was satisfied. With conditions met, a special $0.50 per share cash dividend, totaling approximately $95 million, was paid to existing Goldcorp shareholders. Goldcorp included, with the exception of net earnings, 100% of Wheaton's operating results from February 14 to April 15, 2005. Net earnings for this period include 82% of Wheaton's operating results. On April 15, 2005, Goldcorp acquired the remaining 18% of Wheaton. A non-controlling interest was assigned to the 18% interest in Wheaton that Goldcorp did not own from February 14 to April 15, 2005 upon which date this non-controlling interest was eliminated. Total consideration amounted to $2,235 million, including acquisition costs, satisfied by the issuance of 143.8 million Goldcorp shares.

SUMMARIZED FINANCIAL RESULTS



Three Months Ended
June 30 March 31
2006 2005 2006 2005
--------------------------------------------------------------------
(note 1) (note 2)

Revenues $ 491,500 $ 301,600 $ 286,300 $ 122,800

Gold produced
(ounces) 378,500 281,000 295,100 275,400

Gold sold
(ounces) 398,700 543,100 288,400 217,500

Average realized
gold price
(per ounce) $ 620 $ 432 $ 560 $ 430

Average London
spot gold price
(per ounce) $ 627 $ 427 $ 554 $ 427

Earnings from
operations $ 225,300 $ 162,400 $ 143,900 $ 53,700

Net earnings $ 190,400 $ 98,000 $ 92,400 $ 29,500

Earnings
per share
Basic $ 0.50 $ 0.30 $ 0.27 $ 0.12
Diluted $ 0.49 $ 0.28 $ 0.24 $ 0.11

Cash flow from
operating
activities $ 240,100 $ 163,900 $ 74,400 $ 80,200

Total cash
costs(i)
(per gold ounce)
(note 3) $ (123) $ 52 $ (88) $ 94

Dividends paid $ 17,400 $ 15,200 $ 15,300 $ 105,300

Cash and cash
equivalents $ 264,600 $ 420,800 $ 169,600 $ 339,000

Total assets $ 6,969,500 $ 3,756,000 $ 5,054,900 $ 3,309,200


Three Months Ended
December 31 September 30
2005 2004 2005 2004
--------------------------------------------------------------------

Revenues $ 268,300 $ 51,800 $ 203,700 $ 50,400

Gold produced
(ounces) 296,200 166,300 283,700 163,800

Gold sold
(ounces) 307,300 113,800 276,700 112,800

Average realized
gold price
(per ounce) $ 492 $ 432 $ 444 $ 399

Average London
spot gold price
(per ounce) $ 484 $ 434 $ 440 $ 401

Earnings from
operations $ 116,000 $ 20,100 $ 87,000 $ 22,800

Net earnings $ 101,700 $ 14,900 $ 56,500 $ 9,900

Earnings
per share
Basic $ 0.30 $ 0.08 $ 0.17 $ 0.05
Diluted $ 0.27 $ 0.08 $ 0.15 $ 0.05

Cash flow from
operating
activities $ 136,900 $ 22,400 $ 84,800 $ 22,300

Total cash
costs(i)
(per gold ounce)
(note 3) $ (73) $ 127 $ 9 $ 121

Dividends paid $ 15,300 $ 8,500 $ 15,200 $ 8,500

Cash and cash
equivalents $ 562,200 $ 333,400 $ 420,900 $ 315,600

Total assets $ 4,066,000 $ 701,500 $ 3,839,200 $ 648,900

(1) Includes operating results of the acquired Placer Dome assets
from May 12, 2006, the date of the acquisition, to June 30, 2006.

(2) Includes, with the exception of net earnings, 100% of Wheaton's
operating results from February 15, 2005, the date of
acquisition, to March 31, 2005. Net earnings include 82% of
Wheaton's operating results from February 15, 2005 to April 15,
2005 and 100% from April 16, 2005 onwards.

(3) The calculation of total cash costs per ounce of gold for Peak
and Alumbrera is net of by-product copper sales revenue, Luismin
is net of by-product silver sales revenue of $3.90 per silver
ounce sold to Silver Wheaton and La Coipa is net of by-product
silver sales revenue at spot rates.

(i) Non-GAAP measure


Review of Financial Results:

Goldcorp was transformed during February 2005 by the acquisition of Wheaton, which resulted in a substantial increase in revenues, gold production and gold sales, earnings, cash flows and assets. Also, as a result of the acquisition of certain Placer Dome operations, effective May 12, 2006, Goldcorp further increased revenues, gold production and gold sales, earnings, cash flows and assets. The second quarter 2006 financial results increased compared to the corresponding period from the prior year as a result of the acquisition of Placer Dome operations, combined with the higher realized metal prices and lower cash costs.

During the second quarter of 2005 Goldcorp discontinued the Company's previous policy of holding back from sale approximately one third of mine gold production. The gold bullion on hand at March 31, 2005 of 275,700 ounces was sold in the second quarter of 2005.

RESULTS OF OPERATIONS



Gold
For the three months ended produced Gold sold
June 30, 2006 and 2005 Revenues (ounces) (ounces)
--------------------------------------------------------------------

Red Lake (note 1) 2006 $ 93,800 143,700 150,100
2005 177,000 142,800 408,500

Porcupine (note 1) 2006 15,300 23,500 25,300
2005 - - -

Musselwhite (note 1) 2006 15,100 21,700 24,400
2005 - - -

Alumbrera (note 2) 2006 230,000 68,500 74,000
2005 65,600 48,900 47,700

Luismin (note 3) 2006 44,100 53,600 54,900
2005 25,600 41,800 44,000

Peak (note 4) 2006 22,900 25,500 26,300
2005 12,300 31,100 27,200

Amapari 2006 12,300 18,900 19,700
2005 - - -

La Coipa (notes 1, 5) 2006 10,400 7,600 9,200
2005 - - -

Wharf 2006 9,700 15,500 14,800
2005 7,000 16,400 15,700

Silver Wheaton 2006 47,400 - -
2005 19,200 - -

Corporate and
Eliminations (note 1) 2006 (9,500) - -
2005 (5,100) - -

Total 2006 $ 491,500 378,500 398,700
2005 301,600 281,000 543,100


Average
realized Earnings Total cash
For the three months ended gold price (loss) from costs
June 30, 2006 and 2005 (per ounce) operations (per ounce)
--------------------------------------------------------------------

Red Lake (note 1) 2006 $ 623 $ 53,500 $ 180
2005 33 129,200 81

Porcupine (note 1) 2006 610 3,400 344
2005 - - -

Musselwhite (note 1) 2006 617 1,900 361
2005 - - -

Alumbrera (note 2) 2006 608 143,500 (1,661)
2005 422 26,300 (442)

Luismin (note 3) 2006 629 13,300 109
2005 427 3,300 115

Peak (note 4) 2006 631 7,100 193
2005 442 2,100 246

Amapari 2006 630 (6,700) 572
2005 - - -

La Coipa (notes 1, 5) 2006 612 (1,500) 197
2005 - - -

Wharf 2006 618 1,800 343
2005 429 600 291

Silver Wheaton 2006 - 24,400 -
2005 - 6,600 -

Corporate and
Eliminations (note 1) 2006 - (15,400) -
2005 - (5,700) -

Total 2006 $ 620 $ 225,300 $ (123)
2005 432 162,400 52

(1) Includes operating results of the acquired Placer Dome assets
from May 12, 2006, the date of acquisition, to June 30, 2006.

(2) Includes Goldcorp's 37.5% share of the results of Alumbrera.
The calculation of total cash costs per ounce of gold for
Alumbrera is net of by-product copper sales revenue.

(3) All Luismin silver is sold to Silver Wheaton at a price of
$3.90 per ounce. The calculation of total cash costs per
ounce of gold is net of by-product silver sales revenue.

(4) The calculation of total cash costs per ounce of gold at
Peak is net of by-product copper sales revenue.

(5) Includes Goldcorp's 50% share of the results of La Coipa
from May 12, 2006. The calculation of total cash costs per
ounce of gold for La Coipa is net of by-product silver sales
revenue from May 12, 2006 to June 30, 2006.


Gold
For the six months ended produced Gold sold
June 30, 2006 and 2005 Revenues (ounces) (ounces)
--------------------------------------------------------------------

Red Lake (note 1) 2006 $ 161,200 265,000 270,800
2005 232,900 341,300 535,900

Porcupine (note 1) 2006 15,300 23,500 25,300
2005 - - -

Musselwhite (note 1) 2006 15,100 21,700 24,400
2005 - - -

Alumbrera (notes 2, 3) 2006 354,900 130,800 125,500
2005 86,800 72,600 62,900

Luismin (notes 2, 4) 2006 78,300 101,400 101,400
2005 39,400 62,200 67,300

Peak (notes 2, 5) 2006 45,500 58,900 61,600
2005 20,400 46,200 44,500

Amapari 2006 24,900 39,300 42,300
2005 - - -

La Coipa (notes 1, 6) 2006 10,400 7,600 9,200
2005 - - -

Wharf 2006 17,000 25,400 26,600
2005 22,000 34,100 50,000

Silver Wheaton (note 2) 2006 73,100 - -
2005 30,100 - -

Corporate and
Eliminations (notes 1, 2) 2006 (18,000) -
2005 (7,100) - -

Total 2006 $ 777,700 673,600 687,100
2005 424,500 556,400 760,600


Average
realized Earnings Total cash
For the six months ended gold price (loss) from costs
June 30, 2006 and 2005 (per ounce) operations (per ounce)
--------------------------------------------------------------------

Red Lake (note 1) 2006 $ 594 $ 97,800 $ 157
2005 432 168,300 81

Porcupine (note 1) 2006 610 3,400 344
2005 - - -

Musselwhite (note 1) 2006 617 1,900 361
2005 - - -

Alumbrera (notes 2, 3) 2006 595 221,900 (1,517)
2005 429 35,300 (431)

Luismin (notes 2, 4) 2006 595 22,300 113
2005 428 6,700 103

Peak (notes 2, 5) 2006 589 14,200 192
2005 435 3,800 256

Amapari 2006 590 (9,700) 514
2005 - - -

La Coipa (notes 1, 6) 2006 612 (1,500) 197
2005 - - -

Wharf 2006 592 3,800 331
2005 430 2,700 284

Silver Wheaton (note 2) 2006 - 35,700 -
2005 - 10,500 -

Corporate and
Eliminations (notes 1, 2) 2006 - (20,500) -
2005 - (11,200) -

Total 2006 $ 595 $ 369,300 $ (108)
2005 431 216,100 64

(1) Includes operating results of the acquired Placer Dome assets
from May 12, 2006, the date of acquisition, to June 30, 2006.

(2) Includes 100% of Wheaton operating results for the period
subsequent to February 14, 2005, the date of acquisition.

(3) Includes Goldcorp's 37.5% share of the results of Alumbrera.
The calculation of total cash costs per ounce of gold for
Alumbrera is net of by-product copper sales revenue.

(4) All Luismin silver is sold to Silver Wheaton at a price of
$3.90 per ounce. The calculation of total cash costs per
ounce of gold is net of by-product silver sales revenue.

(5) The calculation of total cash costs per ounce of gold at
Peak is net of by-product copper sales revenue.

(6) Includes Goldcorp's 50% share of the results of La Coipa since
May 12, 2006. The calculation of total cash costs per ounce of
gold for La Coipa is a co-product cash costs.


OPERATIONAL REVIEW

Red Lake



Operating Three Months Ended
Data June 30 June 30 Mar 31 Dec 31 Sep 30 June 30
(note 2) 2006 2006 2006 2005 2005 2005
--------------------------------------------------------------------
(six (full
weeks) quarter)
(note 1)

Tonnes of ore
milled 137,100 191,900 184,700 173,800 159,000 165,600
Average mill
head grade
(grams/
tonne) 34 29 29 32 36 40
Average
recovery
rate (%) 96% 97% 97% 97% 97% 97%
Gold produced
(ounces) 143,700 167,600 170,100 170,600 197,000 200,000
Gold sold
(ounces) 150,100 172,400 168,900 180,000 187,900 473,700
Average
realized
gold price
(per ounce) $ 623 $ 625 $ 560 $ 489 $ 445 $ 433
Total
cash costs
(per ounce) $ 180 $ 183 $ 181 $ 193 $ 154 $ 107

Financial Data
--------------------------------------------------------------------
Revenues $93,800 $107,800 $94,600 $88,100 $83,700 $205,000
Earnings from
operations $53,500 $ 52,100 $36,700 $39,600 $33,300 $123,000

(1) Campbell mine operations are included in Goldcorp's operating
results for the period subsequent to May 12, 2006, the date of
acquisition of a number of Placer Dome assets. The six week
column includes 100% Red Lake mine results for the quarter plus
Campbell mine results from May 12, 2006 through to June 30, 2006.

(2) Operating results for all comparative purpose have been combined
for presentation purposes for the previously separate Red Lake
and Campbell mines. The combined mines will be presented as one
mine going forward.


The Red Lake mines produced 167,600 ounces of gold for the quarter consisting of 114,600 ounces from the Red Lake mine and 53,000 ounces from the Campbell mine. The production level reflects lower ore grades at Red Lake and re-alignment of the overall mining plan and sequence. This was done in order to allow significant new development at depth in support of the shaft and to accommodate the integration of the Red Lake and Campbell operations. The Canadian dollar was approximately 11% stronger relative to the United States dollar, compared to the second quarter of 2005, which negatively impacted total cash costs per ounce. All these factors resulted in combined cash costs of $180 per ounce in the second quarter of 2006. Previously, the Company had adopted a policy of holding back from sale approximately one-third of mine production. This practice was discontinued effective April 1, 2005 and the gold bullion on hand (275,700 ounces) at that date was sold during the second quarter of 2005.

The expansion project progressed well during the quarter as development work required to connect the new shaft to the existing mine moved ahead. The shaft sinking was successfully deepened by 109 metres during the quarter, bringing the depth to 1,672 metres as at June 30, 2006. The sink rate was above expectations. The expanded mill is expected to be ready for operation in mid-2007 and the expansion project including the shaft is on track for completion in late 2007.

Integration activities continued at Red Lake during the second quarter, including implementing synergies, modifying the organizational structure, optimizing the existing work forces, reviewing the short and long-term mine plans and advancing underground development. Work also continued on completing a physical surface road connection and establishing a combined IT and communications connection between the two mines. Priority development is being driven from each mine to establish an underground connection between the two mines (for the first time), located at the 34 and 36 levels.

Porcupine (Goldcorp's interest 51%)



Operating Three Months Ended
Data June 30 June 30 Mar 31 Dec 31 Sep 30 June 30
(note 1) 2006 2006 2006 2005 2005 2005
--------------------------------------------------------------------
(six (full
weeks) quarter)

Tonnes of ore
milled 304,900 554,700 508,500 543,200 526,700 557,700
Average mill
head grade
(grams/
tonne) 2.59 2.57 2.17 2.77 2.82 3.12
Average
Recovery
rate (%) 94% 90% 90% 92% 93% 94%
Gold produced
(ounces) 23,500 41,300 31,400 42,000 40,300 53,600
Gold sold
(ounces) 25,300 42,000 33,400 39,500 47,500 48,700
Average
realized
gold price
(per ounce) $ 610 $ 616 $ 554 $ 486 $ 440 $ 429
Total cash
costs (per
ounce) $ 344 $ 361 $ 434 $ 348 $ 340 $ 232

Financial Data
--------------------------------------------------------------------
Revenues $15,300 $26,000 $18,500 $19,200 $20,900 $20,900
Earnings from
operations $ 3,400 $ 4,400 $ (800) $(7,400) $(1,100) $ 3,400

(1) Porcupine's operations are included in Goldcorp's operating
results for the period subsequent to May 12, 2006, the date of
acquisition of a number of Placer Dome assets. Other prior
period results are shown for comparative purpose only.


Gold production in second quarter 2006 improved by 32% over the first quarter as result of more selective mining at the Pamour open pit and the ramp up of production from the Dome underground operation. Gold production during the second quarter of 2006 at the Porcupine Joint Venture was 24% lower than 2005 figures due to the transition from the higher grade Dome open pit to the Pamour open pit late in 2005. Budgeted grades from the Pamour were initially negatively impacted by higher than expected mining dilution and local grade variability, although grades improved slightly in the second quarter.

Second quarter 2006 cash costs per ounce improved 17% over first quarter 2006 due to higher production and a lower cost of sales. Cash costs per ounce in comparison to prior year increased due to higher commodity and energy costs as the operation processed a similar number of tonnes compared to the second quarter of 2005, though at lower grades. The increase was also impacted by an 11% increase in value of the Canadian dollar against the United States dollar quarter-over-quarter. Overburden stripping of Stage Two at Pamour is scheduled to begin in the third quarter now that the overlaying public highway has been relocated resulting in access to further ore zones early in 2007.

Musselwhite (Goldcorp's interest - 68%)



Operating Three Months Ended
Data June 30 June 30 Mar 31 Dec 31 Sep 30 June 30
(note 1) 2006 2006 2006 2005 2005 2005
--------------------------------------------------------------------
(six (full
weeks) quarter)

Tonnes of ore
milled 118,900 218,900 240,800 263,800 254,900 244,800
Average mill
head grade
(grams/
tonne) 5.87 5.65 4.71 4.78 5.39 5.59
Average
Recovery
Rate (%) 97% 94% 91% 94% 95% 95%
Gold produced
(ounces) 21,700 37,600 33,200 38,600 44,500 41,400
Gold sold
(ounces) 24,400 37,800 33,900 38,500 43,600 41,700
Average
realized
gold price
(per ounce) $ 617 $ 618 $ 553 $ 487 $ 440 $ 429
Total cash
costs (per
ounce) $ 361 $ 375 $ 417 $ 370 $ 323 $ 320

Financial Data
--------------------------------------------------------------------
Revenues $15,100 $23,400 $18,800 $18,700 $19,200 $17,900
Earnings from
operations $ 1,900 $ 4,500 $ (300) $ - $ 500 $ (400)

(1) Musselwhite's operations are included in Goldcorp's operating
results for the period subsequent to May 12, 2006, the date of
acquisition of a number of Placer Dome assets. Other prior
period results are shown for comparative purpose only.


In the second quarter of 2006, the grade improved 20% compared with the first quarter of 2006, as a result of accessing higher grade zones. Production for the second quarter was 37,600 ounces and cash costs per ounce of $375 which were lower than the first quarter of 2006 primarily due to higher gold production. Cash costs per ounce are higher than the corresponding period for the previous year due to an 11% appreciation in the Canadian dollar and higher energy and commodity costs.

The mine has incurred higher than anticipated backfill due to rescheduling of the mining sequence. As a result of the increased backfill, the mining ore supply reduced which in turn reduced tonnes milled for the current quarter. Backfill is expected to reduce significantly for the remainder of the year.

Excellent results continue to be returned from the PQ Deeps underground exploration with higher than average grades for the ore-body. Notably, results from the B and C Blocks have exceeded expectations. Drilling also commenced on the North Shore drill site, two kilometres north of the last economic intersection on the PQ Deeps ore-body.

Alumbrera (Goldcorp's interest - 37.5%)



Three Months Ended
June 30 Mar 31 Dec 31 Sep 30 June 30
Operating Data 2006 2006 2005 2005 2005
--------------------------------------------------------------------

Tonnes of
ore mined 2,550,200 2,366,600 3,308,900 2,527,400 3,442,900
Tonnes of
waste removed 7,363,600 8,059,500 7,667,800 8,188,600 7,535,900
Ratio of
waste to ore 2.9 3.4 2.3 3.2 2.2
Tonnes of
ore milled 3,472,600 3,308,600 3,591,800 3,255,900 3,450,000
Average mill
head grade
- Gold
(grams/tonne) 0.78 0.76 0.77 0.60 0.58
- Copper (%) 0.61% 0.63% 0.65% 0.57% 0.56%
Average
recovery rate
- Gold (%) 79% 77% 79% 77% 77%
- Copper (%) 89% 89% 91% 89% 91%
Gold produced
(ounces) 68,500 62,300 71,900 48,100 48,900
Copper produced
(thousands
of pounds) 41,800 40,800 46,800 36,300 39,000
Gold sold (ounces) 74,000 51,500 69,200 48,200 47,700
Copper sold
(thousands
of pounds) 46,700 33,500 49,500 38,600 33,900
Average
realized price
- Gold
(per ounce)
(note 2) $ 608 $ 577 $ 498 $ 452 $ 422
- Copper
(per pound)
(note 2) $ 4.44 $ 3.25 $ 2.28 $ 1.85 $ 1.59
Total cash costs
(per ounce)
(note 1) $ (1,661) $ (1,310) $ (871) $ (594) $ (442
Total co-product
cash costs
(per ounce) $ 207 $ 162 $ 150 $ 185 $ 169

Financial Data
--------------------------------------------------------------------
Revenues $ 230,000 $125,000 $130,900 $ 81,500 $ 65,600
Earnings
from operations $ 143,500 $ 78,400 $ 63,100 $ 36,000 $ 26,300

(1) The calculation of total cash costs per ounce of gold for
Alumbrera is net of by-product copper sales revenue. If
copper sales were treated as a co-product, average total
cash costs at Alumbrera for the three months ended June 30, 2006
would be $207 per ounce of gold and $1.49 per pound of copper
(June 30, 2005 - $169 per ounce of gold and $0.73 per pound
of copper).

(2) The realized metal prices are different to spot prices, due
to price adjustments on sales receivables in the highly
variable price environment.


Total material mined for the quarter was above expectations with higher mine productivities being achieved overall. Total cash costs decreased in the second quarter to minus $1,661 per ounce of gold, net of by-product copper credits, compared to minus $442 per ounce during the same period last year. This decrease in total cash costs resulted primarily from further improvement in the copper price to an average of $4.44 per pound. Co-product cash costs increased to $207 per ounce of gold in the second quarter of 2006, primarily due to the impact of the royalty of Yacimientos Mineros de Agua de Dionisio, a government owned corporation which commenced during the second quarter.

Production in the second quarter was 68,500 ounces of gold and 41.8 million pounds of copper and sales were 74,000 ounces of gold and 46.7 million pounds of copper. The difference between production and sales is due to normal timing differences in shipments and delays in the transfer of title which is a requirement for revenue recognition.

The capital expansion of the concentrator to a 40 million tonne per annum milling capacity continues on schedule.

The sustainable development program underway where Alumbrera contributes to the development of community infrastructure is achieving positive results. Alumbrera is presently constructing two technical schools in the Catamarca province and assisting with the reconstruction of two hospitals in Tucuman province.

In August 2006, Alumbrera announced an increase of more than 10% in the ore reserves. An on-going ore delineation drilling program in the Alumbrera pit, undertaken both within the existing ore envelope and for extensions at depth, has confirmed 40 million tonnes (Goldcorp's share - 15 million tonnes) of additional ore reserves. The mine plan was re-optimized based on a new geological model with additional mineralization, and together with improved final pit slope angles. This equates to an additional 265 million pounds (Goldcorp's share - 99 million pounds) of contained copper and 400,000 ounces of gold (Goldcorp's share 150,000 ounces) over the life of the mine, which will extend the mine life into at least 2016.

Luismin



Three Months Ended
June 30 Mar 31 Dec 31 Sep 30 June 30
Operating Data 2006 2006 2005 2005 2005
--------------------------------------------------------------------

Tonnes of
ore milled 267,400 255,800 250,600 244,100 218,700
Average mill
head grade
- Gold
(grams/tonne) 6.61 6.18 5.57 5.55 6.23
- Silver
(grams/tonne) 358 348 298 332 362
Average
recovery rate
- Gold (%) 94% 94% 94% 94% 95%
- Silver (%) 89% 87% 88% 88% 91%
Gold produced
(ounces) 53,600 47,800 42,100 41,000 41,800
Silver produced
(ounces) 2,388,400 2,191,900 1,855,700 2,005,700 1,974,400
Gold sold
(ounces) 54,900 46,500 42,200 39,100 44,000
Silver sold
(ounces) 2,449,100 2,167,900 1,812,300 2,003,800 1,976,400
Average
realized price
- Gold
(per ounce) $ 629 $ 554 $ 486 $ 440 $ 427
- Silver
(per ounce) $ 3.90 $ 3.90 $ 3.90 $ 3.90 $ 3.90
Total cash costs
(per ounce)
(note 1) $ 109 $ 117 $ 145 $ 118 $ 115

Financial Data
--------------------------------------------------------------------
Revenues $ 44,100 $ 34,200 $ 27,000 $ 24,300 $ 25,600
Earnings
from operations $ 13,300 $ 9,000 $ 6,700 $ 4,500 $ 3,300

(1) The calculation of total cash costs per ounce of gold is net of
by-product silver sales revenue of $3.90 per silver ounce.


Luismin continued to achieve record production levels during the second quarter, due to the increased mill throughput and higher than expected grades at San Dimas. In addition, optimization improvements were made at San Dimas consisting of two new leach tanks to help improve recoveries. A total of 53,600 ounces of gold were produced in the second quarter of 2006, an increase of 28% over the 41,800 ounces of gold for the corresponding period in the prior year. In addition, 2,388,400 ounces of silver were produced, 21% more than 1,974,400 ounces produced in the corresponding period in 2005. As a result, cash costs were $109 per ounce, or 5% lower than the corresponding period in 2005.

Exploration activities continued in the San Dimas district, within the high grade zone area of the Central Block with the deeper level intercepts exhibiting wider and richer mineralization.

Three new exploration drifts were started in the San Dimas district in order to develop more ore resources farther from the current operations. These drifts will provide essential infrastructure for exploration drilling and drifting.

At the Nukay mine adjacent to the Los Filos project, the extensive exploration project continues to achieve positive results with higher grade underground ore being delineated.

Amapari



Three Months Ended
June 30 Mar 31
Operating Data 2006 2006
--------------------------------------------------------------------

Tonnes of ore mined 548,100 362,400
Tonnes of waste removed 3,220,900 3,074,600
Ratio of waste to ore 5.9 8.5
Tonnes of ore processed 475,600 302,400
Average grade of gold
processed (grams/tonne) 2.00 2.03
Average recovery rate (%)
(note 1) 68% 66%
Gold produced (ounces)
(note 2) 18,900 20,400
Gold sold (ounces) 19,700 22,600
Average realized
gold price (per ounce) $ 630 $ 556
Total cash costs
(per ounce) $ 572 $ 464

Financial Data
--------------------------------------------------------------------
Revenues $ 12,300 $ 12,600
Loss from operations $ (6,700) $ (3,000)

(1) Gold recovery is determined when the individual leach pads are
reclaimed and production is reconciled.

(2) Tonnes of ore processed each quarter do not necessarily
correlate to ounces produced during the quarter, as there is
a time delay between placing tonnes on the leach pad and
pouring ounces of gold.


During the second quarter of 2006, the Amapari mine produced 18,900 ounces of gold and sold 19,700 ounces of gold.

Ore processing improved significantly (57%) from the previous quarter with productivity improvements to the crushing, and stacking circuits taking affect. Despite the increase in tonnes of ore mined and processed, there is a time delay between placing tonnes on the leach pad and production of gold. Gold production was negatively impacted by the lower than planned gold grades from the Tap AB pit, which is experiencing a negative reconciliation to the reserve model. Geological studies to determine the cause have commenced. Gold recoveries from the leach pads, whilst improving slightly from the previous quarter were lower than expected. Optimization of the ADR plant carbon handling systems and the leach pad irrigation systems are continuing, as well as modifications to reagent use and ore stacking sequences, in order to improve on leach pad gold recovery performance. In particular, further column testing is underway to optimize the agglomeration process to assist leaching. The reclaimer and spent ore conveyor and disposal system are nearing designed operating levels as work programs continue to improve availabilities and efficiencies.

Mining of ore and waste from the Tap AB pit continued above plan during the quarter, with 3.2 million tonnes of waste removed and 548,100 tonnes of ore mined (including 73,000 tonnes of low grade ore placed into low grade stockpiles).

Total cash costs for the quarter were $572 per ounce, negatively impacted by the lower than planned gold head grades and recoveries. Cost reduction programs have been implemented including; a 10% reduction in the total site workforce, the termination and the re-negotiation of numerous service and supply contracts, and a re-optimization of the mine plan.

During the second quarter, heap leach inventory was written by $2 million to net realizable value.

Exploration work programs were accelerated on a number of projects with 7,000 metres of drilling and 4,000 metres of geophysical surveys completed during the quarter. Diamond drilling has commenced in the untested gap between the Tapereba C and Urucum ore bodies, based on the encouraging results received from the geophysical surveys conducted in the previous quarter. Diamond drilling was concentrated in the Vila do Mejo, Urucu, and Gap areas as these presented better results than the Timbo area where drilling was temporarily suspended due to difficulties in finding available drilling services in Brazil.

La Coipa (Goldcorp's interest - 50%)



Operating Three Months Ended
Data June 30 June 30 Mar 31 Dec 31 Sep 30 June 30
(note 1) 2006 2006 2006 2005 2005 2005
--------------------------------------------------------------------
(six (full
weeks) quarter)

Tonnes of ore
milled 383,000 738,000 788,800 845,600 758,000 793,200
Average mill
head grade
- Gold
(grams/tonne) 0.84 0.82 1.19 1.10 1.00 0.95
- Silver
(grams/tonne) 61 54 58 43 45 45
Average
recovery rate
- Gold (%) 81% 83% 83% 82% 79% 80%
- Silver (%) 62% 63% 52% 55% 46% 54%
Gold produced
(ounces) 7,600 16,600 25,100 23,500 19,400 19,300
Silver
produced
(ounces) 365,100 814,900 769,500 628,900 514,200 659,800
Gold sold
(ounces) 9,200 18,300 27,000 22,900 18,900 21,500
Silver sold
(ounces) 410,000 762,500 751,700 593,300 589,000 704,300
Average
realized
price
- Gold
(per ounce) $ 612 $ 629 $ 558 $ 489 $ 439 $ 427
- Silver
(per ounce) $ 11.33 $ 12.34 $ 10.04 $ 8.12 $ 7.01 $ 7.11
Total
cash costs
(per ounce)
(note 2) $ 197 $ 44 $ 194 $ 262 $ 343 $ 192

Financial Data
--------------------------------------------------------------------
Revenues $10,400 $21,000 $22,600 $16,000 $12,400 $14,200
Earnings
(loss) from
operations $(1,500) $4,300 $ 7,300 $ 2,300 $ (300) $ 3,200

(1) La Coipa's operations are included in Goldcorp's operating
results for the period subsequent to May 12, 2006, the date of
acquisition of certain Placer assets. Other prior period results
are shown for comparative purposes only.

(2) The calculation of total cash costs per ounce of gold is net of
by-product silver sales revenue. If the silver sales were
treated as a co-product, average total cash costs at La Coipa
for the three months ended June 30, 2006, would be $305 per
ounce of gold.


During the second quarter of 2006, La Coipa experienced lower gold grade than in previous quarters, thus producing 16,600 ounces of gold. A total of 814,900 ounces of silver were produced in the second quarter of 2006, an increase of 24% over the 659,800 ounces of silver from the corresponding period in the prior year, due to higher silver grades and increased silver recoveries.

The newly pre-stripped Puren pit began production one month earlier than planned with first ore being fed to the mill in June. Tonnes milled were lower this quarter due to the start of treatment of Puren ore feed. Over the coming period Puren will contribute to higher silver grades to the mill. The Puren pit is contained in a stand alone joint venture with Codelco where the La Coipa mine is the project manager and holding 65% equity in the deposit.

Cash costs per ounce for the full quarter ending June 30, 2006, were lower than the first quarter due to higher silver by-product sales revenue. The cash costs per ounce were higher for the six weeks stub period due to stripping costs related to the advance in production from Puren. Earnings from operations, for the full quarter, were positively impacted by higher realized gold and silver prices, however, earnings for the period May 12, 2006 to June 30, 2006 was negatively impacted due to an inventory adjustment at Puren.

La Coipa continued with strategic exploration on known anomalies within trucking distance of the mill.

Peak



Three Months Ended
June 30 Mar 31 Dec 31 Sep 30 June 30
Operating Data 2006 2006 2005 2005 2005
--------------------------------------------------------------------

Tonnes of
ore milled 180,700 173,700 176,600 148,700 165,200
Average mill
head grade
- Gold
(grams/tonne) 4.90 6.61 8.26 6.94 6.67
- Copper (%) 0.61% 0.70% 0.65% 0.46% 0.28%
Average
recovery rate
- Gold (%) 90% 90% 93% 89% 88%
- Copper (%) 79% 80% 84% 71% 60%
Gold produced
(ounces) 25,500 33,400 43,600 29,700 31,100
Copper produced
(thousands
of pounds) 1,907 2,131 2,111 1,065 579
Gold sold
(ounces) 26,300 35,300 50,000 26,200 27,200
Copper sold
(thousands
of pounds) 2,114 1,915 1,826 734 505
Average
realized price
- Gold
(per ounce) $ 631 $ 558 $ 493 $ 449 $ 442
- Copper
(per pound) $ 3.66 $ 2.21 $ 1.88 $ 1.71 $ 1.53
Total cash costs
(per ounce)
(note 1) $ 193 $ 192 $ 192 $ 241 $ 246

Financial Data
--------------------------------------------------------------------
Revenues $ 22,900 $ 22,600 $ 27,000 $ 11,500 $ 12,300
Earnings
from operations $ 7,100 $ 7,100 $ 11,300 $ 1,900 $ 2,100

(1) The calculation of total cash costs per ounce of gold is net of
by-product copper sales revenue. If the copper sales were
treated as a co-product, average total cash costs at Peak for
the three months ended June 30, 2006, would be $336 per ounce
of gold and $2.48 per pound of copper.


The Peak mine sold 26,300 ounces of gold for the second quarter compared with 27,200 ounces sold for the corresponding period in the prior year. Copper sales have been increasing steadily on a quarter-by-quarter basis due to higher grades and increased mill throughput. Damage sustained to an underground production drill rig prevented access to the principal production stopes for approximately six weeks and resulted in the lower gold grades being fed to the mill. This drill rig is now back in production and no ore has been lost as a consequence of this rescheduling. Plant capacity has increased as reported previously with the mill throughput, achieving a production record for the Peak mine. Recoveries continue to improve even at the higher throughput; however relative recoveries were impacted in the second quarter by the lower gold grade. The total cash costs of $193 per gold ounce were a result of continued mill improvements and higher by-product copper credits.

Exploration work and delineation drilling continues to focus on New Cobar, Peak Deeps and Perseverance Zone D.

Wharf



Three Months Ended
June 30 Mar 31 Dec 31 Sep 30 June 30
Operating Data 2006 2006 2005 2005 2005
--------------------------------------------------------------------

Tonnes of
ore mined 729,100 701,700 775,600 755,500 584,300
Tonnes of
ore processed 715,300 787,900 644,300 773,900 561,100
Average grade
of gold processed
(grams/tonne) 1.04 1.01 0.95 1.04 0.99
Average recovery
rate (%) 75% 75% 75% 75% 75%
Gold produced
(ounces) (note 1) 15,500 9,900 17,200 11,200 16,400
Gold sold (ounces) 14,800 11,800 15,500 15,300 15,700
Average realized
gold price
(per ounce) $ 618 $ 559 $ 497 $ 444 $ 429
Total cash costs
(per ounce) $ 343 $ 315 $ 366 $ 307 $ 291

Financial Data
--------------------------------------------------------------------
Revenues $ 9,700 $ 7,300 $ 8,200 $ 7,000 $ 7,000
Earnings
from operations $ 1,800 $ 1,900 $ 800 $ 500 $ 600

(1) Tonnes of ore processed do not correlate directly to ounces
produced during the quarter as there is a time delay between
placing ore on the leach pad and producing gold.


The Wharf Mine produced 15,500 ounces of gold in the second quarter of 2006 compared with 16,400 ounces of gold in the second quarter of 2005. The lower production is a result of higher silver grades in the ore thus slowing metal recovery from solution in the on- site refinery. Gold production significantly increased as compared to the first quarter of 2006, and there is still considerable gold and silver in circuit waiting to be recovered. This backlog is expected to be produced over the second half of 2006. Total cash costs for the quarter were $343 per ounce, compared to $291 per ounce during the second quarter of 2005, primarily as a result of the lower gold sales and the build up of gold in leach solutions.

Silver Wheaton Corp (Goldcorp's interest - 57%)



(100% figures shown) Three Months Ended
June 30 Mar 31 Dec 31 Sep 30 June 30
Operating Data 2006 2006 2005 2005 2005
--------------------------------------------------------------------

Ounces of
silver sold
- Luismin 2,447,500 2,171,000 1,820,100 2,003,800 2,088,000
- Zinkgruvan 482,900 501,000 356,600 531,000 580,400
- Yauliyacu 875,000 - - - -
- Total 3,805,400 2,672,000 2,176,700 2,534,800 2,668,400
Average realized
silver price
(per ounce) $ 12.46 $ 9.62 $ 8.03 $ 7.13 $ 7.22
Total cash costs
(per silver
ounce) $ 3.90 $ 3.90 $ 3.90 $ 3.90 $ 3.90

Financial Data
--------------------------------------------------------------------
Revenues $ 47,400 $ 25,700 $ 17,400 $ 18,100 $ 19,300
Earnings
from operations $ 24,400 $ 11,300 $ 5,700 $ 5,100 $ 5,400


As of March 31, 2006, Goldcorp owned 62% of Silver Wheaton, this interest decreased to 57% as a result of Silver Wheaton's public offering during the second quarter. In April 2006, Silver Wheaton closed a C$200 million public offering of 16.7 million common shares at a price of C$12.00 per share, on a bought deal basis. This dilution of the Company's interest gave rise to a non-taxable dilution gain of $61.1 million that was recognized in earnings in the three months ending June 30, 2006.

In March 2006, Silver Wheaton entered into an agreement with Glencore International AG, to purchase 4.75 million ounces of silver per year for a period of 20 years, based on production from their Yauliyacu mining operation in Peru. Total upfront consideration paid was $285 million. In addition, a cash payment of $3.90 per ounce of silver delivered is due under the contract, subject to inflationary adjustment. In the second quarter of 2006, Silver Wheaton purchased 875,000 ounces of silver from the Yauliyacu mining operations.

PROJECT DEVELOPMENT REVIEW

Los Filos Project

During the first quarter, the feasibility study was completed of the combined Los Filos and Bermejal deposits as a twin open pit operation with a single heap leach pad facility. The combined deposits will be referred to as the Los Filos Project going forward. The mine reserve and resources total over 5.0 million ounces with 4.51 million ounces in proven and probable reserve status.

The Los Filos and Bermejal deposits will be developed together with two different methods of ore processing. Higher grade ore from within the Los Filos deposit will be crushed to 19mm and agglomerated before being conveyor stacked and heap leached. Lower grade ore from Los Filos and El Bermejal deposits will be hauled from the open pit directly to the leach pad to be bulk heap leached. The recovery solution will be treated to produce a final gold dore product on site.

Project construction has progressed well and remains on schedule to be completed by the end of 2006 with commercial production planned to start in the second quarter of 2007. Commercial production for 2007 is expected to be 200,000 ounces of gold rising to 350,000 ounces in 2008.

Basic support infrastructure works are complete with the main access road and main substation already servicing project activities. The water supply system is also servicing project activities at partial capacity with only minor commissioning details to finalize.

Los Filos pit mine equipment fleet is fully commissioned and operating with the Bermejal pit fleet starting to arrive on site. The training program for Bermejal operators is well underway. Pre-stripping of both pits is progressing according to schedule.

In the process area the heap leach pad is 70% complete; crushing, conveying and agglomeration 11% complete; gold recovery facilities 10% complete, and process ancillary facilities 30% complete.

All permits required for construction and the operation stage at the Los Filos project have been granted with the exception of water usage and the fuel franchise both of which are expected to be approved during the third quarter of 2006.

The environmental studies required for the project under the Environmental Impact Assessment provided the foundation for planning and developing environmental control measures for mining and processing activities. Most of the preventive measures were incorporated into the design of the industrial facilities to protect and maintain the quality of existing environmental elements.

The current construction works have increased job opportunities for the inhabitants of surrounding towns. Food services, lodging, and transportation activities have also increased during the past year and today the Los Filos project is estimated to provide employment for 80% of the local population. In addition to employment opportunities, several community benefit programs such as health and safety enhancement, handicapped support, and secondary school lecture club are being sponsored.

Project capital expenditures cumulative to date amounted to $143 million with $31 million being expended during the three months ended June 30, 2006. . Total project capital expenditures are now expected to be $265 million, an increase of $30 million, primarily related to design modifications to the crushing and heap leach facilities and system upgrades.

Pueblo Viejo Project

At the Pueblo Viejo project, Goldcorp finalized a shareholder's agreement with Barrick as a 40% owner and with Barrick as 60% owner and the project operator. Barrick continued to update the feasibility analysis prepared by Placer Dome and review other work completed on the project. Activities relating to government and community relations and environmental permitting for both the mine and the related power plant are ongoing. In addition, work began on a 3,000-metre, 10-hole diamond drill program to test the extension of mineralization between two ore bodies.

Eleonore Project

The primary focus on the Eleonore project by Goldcorp has been on confirming earlier Virginia exploration work, including the confirmation of the continuity of the Roberto Zone mineralization over closer spaced intervals. The extensive infill drilling program since April 1, 2006, including 76 drill holes for 31 kilometres of drilling has confirmed these two items.

The priority on the property is to continue the drill program to allow the start of the engineering scoping studies planned for late in 2006. The ongoing exploration and drilling program will primarily concentrate on three themes;

- continuing with the "confirmatory" drilling already in progress,

- exploring the strike extent of the ore-body at both ends, and

- exploring the depth potential of the Roberto Zone.

Drilling to date has been limited to 900 metres vertical in depth. The down-dip continuity to 2,000 metres vertical will be explored with drill rigs with greater capability.

In parallel, the project exploration team will separately carry out district surface mapping and delineation work to determine the strike extent of the mineralization and assist in developing drill-hole targets aimed at extending the lateral extent of the ore body.

During the remaining part of 2006 environmental and engineering programs will continue to expand. The baseline environmental data collection has already commenced and will continue throughout project development. With the present site reliant on winter snowmobile trail or summer lake barging operations for logistical support, studies are being carried out on the design of the permanent airstrip and access road. Construction of the airstrip and access road is expected to take place during 2007 and 2008.

Once the bulk of the infill drilling has been completed, a project scoping study will be carried out to determine the best scale of operation which will likely be a combined open pit and underground operation. It is anticipated that the milling operation will involve conventional gold processing techniques and a suitable tailing dam site will be identified. Regional infrastructure is excellent to support a future mining operation with available power, water and year round highway access near by. These advantages together with the province of Quebec being a regulatory friendly environment further reinforce the quality of this asset.

In line with Goldcorp's commitment to the importance of sustainable development and social relationships, the project team has embraced the communication process that Virginia had established with the local First Nations group, the Cree Nation of Wemindji. This process is working well with a transparent approach to working with all local stakeholders. Discussions have also commenced with various government departments and Hydro-Quebec.

EXPENSES



Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
2006 2005 2006 2005
--------------------------------------------------------------------
Depreciation
and depletion $ 73,161 $ 40,313 $ 118,928 $ 57,892
Corporate
administration 10,679 6,784 19,227 10,792
Exploration 6,327 2,493 10,247 4,010


Depreciation and depletion, which relates to mining activities, increased to $73.2 million for the quarter (six months ended June 30, 2006 - $118.9 million), compared to $40.3 million in 2005 (six months ended June 30, 2005 - $57.9 million). The significant increase in depreciation and depletion is due to the acquisition of certain Placer Dome assets effective May 12, 2006, and the resulting fair value allocation to these assets and the depreciation and depletion related to fair value of Wheaton assets from the prior year.

Corporate administration increased to $10.7 million in the second quarter of 2006 (six months ended June 30, 2006 - $19.2 million), compared to $6.8 million the same period in 2005 (six months ended June 30, 2005 - $10.8 million), due primarily to increased corporate activity relating to acquisition growth.

A total of $6.3 million (2005 - $2.5 million) was invested in exploration during the quarter (six months ended June 30, 2006 -$10.2 million; June 30, 2005 - $4.0 million). Part of the increase is due to the fact that the current year amount included operating results of acquired Placer Dome assets from May 12, 2006 onwards.

OTHER INCOME (EXPENSE)



Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
2006 2005 2006 2005
--------------------------------------------------------------------
Interest and
other income $ 6,606 $ 2,552 $ 9,636 $ 5,465
Interest and
finance fees (11,773) (61) (13,008) (108)
Stock option
expense (5,800) (2,156) (9,199) (7,476)
Loss on
foreign exchange (1,089) (2,150) (1,304) (3,353)
Non-hedge
derivative loss (11,780) - (11,780) -
Gain on marketable
securities, net (167) (1,147) 2,388 1,444
Dilution gain 61,095 - 61,095 -
Corporate
transaction costs - (540) - (3,439)
--------------------------------------------------------------------
$ 37,092 $ (3,502) $ 37,828 $ (7,467)
--------------------------------------------------------------------
--------------------------------------------------------------------


Upon completion of the acquisition of certain Placer Dome assets, the Company's credit facilities of $1.3 billion were drawn down to fund the acquisition. Subsequently in the quarter, the Company received approximately $455 million from the early warrant exercise transaction which was used to repay a portion of the credit facilities. As a result of the credit facilities drawn during the quarter, the Company incurred $11.8 million of interest and finance fees.

In the second quarter, the stock option expense in 2006 relates to the issuance of 2.7 million new stock options during the three months ended June 30, 2006 and vesting of previously issued stock options.

The Company, in the second quarter of 2006, also entered into 66 million pounds of copper forward contracts, on its 2007 production, at a blended rate of $2.91 per pound and 30 million pounds, on its 2008 production, at a blended rate of $2.55 per pound. The contracts do not satisfy the hedge effectiveness criteria, thus a fair value of the mark-t0-market loss of $11.8 million has been recognized in earnings during the quarter.

During the second quarter of 2006, Silver Wheaton, a publicly traded company, completed a public offering of shares, which resulted in a dilution in Goldcorp's share interest from 62% to 57%. As a result of the dilution in share ownership, a dilution gain of $61.1 million arose, being the difference between the Company's share of proceeds and the book value of the underlying equity of these share involved.

Corporate transaction costs pertaining to the acquisition of Wheaton in the amount of $0.5 million, including severance and restructuring of insurance policies were expensed in 2005. There were no corporate transaction costs in the second quarter of 2006.

INCOME AND MINING TAXES

Income and mining taxes for the three months ended June 30, 2006 totaled $61.5 million, approximately 31% of earnings before taxes (excluding non-taxable dilution gain). Income and mining taxes for the three months ended June 30, 2005 were $57.7 million, or 36% of earnings before taxes. Income and mining taxes for the six months ended June 30, 2006 totaled $108.1 million, approximately 31% of earnings before taxes (excluding non-taxable dilution gain). Income and mining taxes for the six months ended June 30, 2005 were $73.7 million, or 35% of earnings before taxes. The lower effective tax rate is reflective of a higher proportionate of earnings being realized from the non-Canadian assets which have a lower effective tax rate.

NON-CONTROLLING INTERESTS

The non-controlling interest relates to Goldcorp's ownership of its subsidiary company, Silver Wheaton. This interest decreased from 62% to 57% as at June 30, 2006, as a result of the closing of the Silver Wheaton public offering in April 2006 for C$200 million. As a result of the dilution in share ownership, a dilution gain of $61.1 million arose during the second quarter of 2006.

The non-controlling interest's share of net earnings for the six months ended June 30, 2006 amounted to $16.2 million.

NON-GAAP MEASURE - TOTAL CASH COST PER GOLD OUNCE CALCULATION

The Company has included a non-GAAP performance measure, total cash cost per gold ounce, throughout this document. The Company reports total cash costs on a sales basis. In the gold mining industry this is a common performance measure but does not have any standardized meaning prescribed by GAAP, and is a non-GAAP measure. The Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following table provides a reconciliation of total cash costs per ounce to the financial statements:



Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
2006 2005 2006 2005
--------------------------------------------------------------------
Operating expenses
per financial
statements $ 175,980 $ 89,605 $ 260,065 $ 135,655
Industrial minerals
operating expense - (2,644) - (5,802)
Treatment and
refining charges
on concentrate
sales 26,005 10,371 41,989 15,070
By-product silver
and copper
sales, and
other (237,523) (66,338) (362,970) (92,218)
Non-cash
adjustments (13,467) (2,540) (13,574) (3,727)
--------------------------------------------------------------------
Total cash costs $ (49,005) $ 28,454 $ (74,490) $ 48,978
--------------------------------------------------------------------
Divided by gold
ounces sold 398,700 543,100 687,100 760,600
--------------------------------------------------------------------
Total cash costs
per ounce $ (123) $ 52 $ (108) $ 64
--------------------------------------------------------------------
--------------------------------------------------------------------


LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2006, the Company held cash and cash equivalents of $265 million (December 31, 2005 - $562 million) and working capital of $317 million (December 31, 2005 - $582 million). The decrease in consolidated cash and cash equivalents primarily resulted from Goldcorp's cash payment to Barrick relating to the acquisition of certain Placer assets as well as Silver Wheaton's cash payment of $245 million to Glencore with respect to the acquisition of the Yauliyacu silver purchase contract.

The Company had debt capacity available totaling $1.4 billion made up of three separate credit facilities including a $500 million revolving credit facility, a $550 million bridge facility and a $350 million revolving credit facility. The facilities are unsecured to finance acquisitions and for general corporate purposes. Amounts drawn incur interest at LIBOR plus 0.625% to 1.125% per annum dependent upon the Company's leverage ratio, increasing by an additional 0.125% per annum if the total amount drawn down exceeds 50% of the facility amount. Undrawn amounts are subject to a 0.15% to 0.25% per annum commitment fee dependent on the Company's leverage ratio. Amounts drawn on the $500 million credit facility are required to be refinanced or repaid by July 29, 2010. Amounts drawn on the $350 million facility will be required to be refinanced or repaid within two years of the closing date and amounts drawn on the $550 million facility will be required to be refinanced or repaid within one year of the closing date. On May 12, 2006, $1.3 billion of these facilities were drawn down to fund the acquisition of certain Placer Dome assets. On June 9, 2006, the Company received approximately $455 million from the early warrant exercise transaction which was used to repay part of the credit facilities. The total amount of credit facilities drawn as at June 30, 2006, is $850 million and an additional $100 million is available on the $350 million facility.

In the opinion of management, the working capital at June 30, 2006, together with cash flows from operations, are sufficient to support the Company's normal operating requirements on an ongoing basis.

Total assets increased to $6,969 million at June 30, 2006 from $4,066 million at December 31, 2005, primarily as a result of the acquisition of Placer dome assets, the acquisition of Virginia, and the addition of a silver purchase agreement between Silver Wheaton and Glencore's Yauliyacu mining operation.

During the quarter, the Company generated operating cash flows of $240 million, compared with cash generated operating activities of $164 million during the same period of 2005.

During the three months ended June 30, 2006, the Company invested a total of $97 million in mining interests, including $26 million at Red Lake, $49 million at the Luismin operations and $5 million at Alumbrera.

During the second quarter of 2006, the Company paid a monthly dividend of $0.015 per share, resulting in total cash dividend payments for the quarter of $17.4 million.

As of August 10, 2006, there were 418 million common shares of the Company issued and outstanding. The Company had 11.9 million stock options outstanding under its share option plan. In addition, the Company had 8.4 million share purchase warrants outstanding (exchangeable for 8.4 million common shares).

Derivative instruments

The Company employs, from time to time, forward and option contracts to manage exposure to fluctuations in metal prices and foreign currency exchange rates.

Commitments

Commitments exist for expenditures for mining interests of approximately $148 million, primarily relating to the Red Lake expansion and construction at Los Filos.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Income and mining taxes

The provision for income and mining taxes is based on the liability method. Future taxes arise from the recognition of the tax consequences of temporary differences by applying enacted or substantively enacted tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities, and for tax losses and other deductions carried forward. The Company records a valuation allowance against any portion of those future income tax assets that it believes will, more likely than not, fail to be realized.

Mining interests

Mining interests are the most significant assets of the Company, representing $4,971 million at June 30, 2006, and represent capitalized expenditures related to the development of mining properties and related plant and equipment and the value assigned to exploration potential on acquisition. Capitalized costs are depreciated and depleted using either a unit-of-sale method over the estimated economic life of the mine to which they relate, or using the straight-line method over their estimated useful lives.

The costs associated with mining properties are separately allocated to reserves, resources and exploration potential, and include acquired interests in production, development and exploration stage properties representing the fair value at the time they were acquired. The values of such mineral properties are primarily driven by the nature and amount of material interests believed to be contained or potentially contained, in properties to which they relate.

The Company reviews and evaluates its mining interests for impairment at least annually or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future undiscounted cash flows are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on expected future production, commodity prices, operating costs and capital costs.

Reclamation and closure costs obligations

Reclamation and closure costs obligations have been estimated based on the Company's interpretation of current regulatory requirements, however changes in regulatory requirements and new information may result in revisions to estimates. The Company recognizes the fair value of liabilities for reclamation and closure costs obligations in the period in which they are incurred. A corresponding increase to the carrying amount of the related assets is generally recorded and depreciated over the life of the asset.

Goodwill and impairment testing

The acquisition of Wheaton and certain Placer Dome operations was accounted for using the purchase method whereby assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition and any excess of the purchase price over such fair value was recorded as goodwill. Goodwill was identified and allocated to reporting units by preparing estimates of the fair value of each reporting unit and comparing this amount to the fair value of assets and liabilities in the reporting unit.

The Company evaluates, on at least an annual basis, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, the Company compares the fair value of its reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its fair value, the Company compares the implied fair value of the reporting unit's goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to operations. Assumptions underlying fair value estimates are subject to significant risks and uncertainties.

Investment in Alumbrera

The Company has joint control over Alumbrera through certain matters requiring unanimous consent in the shareholders' agreement and, therefore, has proportionately consolidated its 37.5% share of the financial statements of Alumbrera from February 15, 2005. On this basis, the Company records its 37.5% share of the assets, liabilities, revenues and expenses of Alumbrera in these consolidated financial statements.


OUTLOOK

Expenditures for mining interests for the remainder of the year are forecast to approximate $209 million, which primarily relate to the Red Lake expansion and the completion of the construction at Los Filos.

The Company has not hedged or sold forward any of its future gold production.

Goldcorp is one of the world's lowest cost and fastest growing multi-million ounce gold producers with operations throughout the Americas and Australia. Gold production in 2006 is expected to approximate 1.8 million ounces on an annualized basis, at a total cash cost of less than $100 per ounce. In the second half of 2006, production is expected to be 950,000 ounces.

SUBSEQUENT EVENT

On July 24, 2006, Goldcorp completed the previously announced sale of Mount Milligan and certain other Canadian exploration interests to Terrane Metals Corp. ("Terrane", formerly Atlas Cromwell Ltd.) for 240 million convertible preferred shares of Terrane at a deemed price of C$0.50 per share. Goldcorp acquired their exploration interests from Barrick in May 2006. The preferred shares are convertible into common shares of Terrane at the option of Goldcorp at any time without any further consideration. On an as-converted basis, Goldcorp would own an approximate 81% equity interest in Terrane's issued and outstanding shares and an approximate 75% on a fully diluted basis. Goldcorp will be required to consolidate Terrane's results of operations from the date of sale.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian Securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver and copper, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver and copper; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in Goldcorp's annual information form for the year ended December 31, 2005, available on SEDAR
at www.sedar.com, and Form 40-F for the year ended December 31, 2005 on file with the United States Securities and Exchange Commission in Washington, D.C. Although Goldcorp has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

CAUTIONARY NOTE REGARDING RESERVES AND RESOURCES

Readers should refer to the annual information form of Goldcorp for the year ended December 31, 2005 dated March 20, 2006, and other continuous disclosure documents filed by Goldcorp since January 1, 2006 available at www.sedar.com, for further information on mineral reserves and resources, which is subject to the qualifications and notes set forth therein.



Consolidated Statements of Earnings
(US dollars and shares in thousands, except per share amounts -
Unaudited)

Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
Note 2006 2005 2006 2005
--------------------------------------------------------------------
Revenues $ 491,484 $ 301,605 $ 777,741 $ 424,455
--------------------------------------------------------------------
Operating
expenses 175,980 89,605 260,065 135,655
Depreciation
and depletion 73,161 40,313 118,928 57,892
--------------------------------------------------------------------
Earnings
from mine
operations 242,343 171,687 398,748 230,908
Corporate
administration 10,679 6,784 19,227 10,792
Exploration 6,327 2,493 10,247 4,010
--------------------------------------------------------------------
Earnings from
operations 225,337 162,410 369,274 216,106
--------------------------------------------------------------------
Other income
(expense)
Interest and
other income 6,606 2,552 9,636 5,465
Interest and
finance fees (11,773) (61) (13,008) (108)
Stock option
expense 10 (5,800) (2,156) (9,199) (7,476)
Loss on
foreign
exchange (1,089) (2,150) (1,304) (3,353)
Non-hedge
derivative
loss 8 (11,780) - (11,780) -
Gain (loss) on
marketable
securities (167) (1,147) 2,388 1,444
Dilution
gain 9 61,095 - 61,095 -
Corporate
transaction
costs - (540) - (3,439)
--------------------------------------------------------------------
37,092 (3,502) 37,828 (7,467)
--------------------------------------------------------------------
Earnings
before taxes
and non-
controlling
interests 262,429 158,908 407,102 208,639
Income and
mining taxes (61,482) (57,677) (108,089) (73,714)
Non-
controlling
interests 9 (10,538) (3,201) (16,203) (7,406)
--------------------------------------------------------------------
Net earnings $ 190,409 $ 98,030 $ 282,810 $ 127,519
--------------------------------------------------------------------
--------------------------------------------------------------------

Earnings
per share 10
Basic $ 0.50 $ 0.30 $ 0.78 $ 0.44
Diluted 0.49 0.28 0.77 0.40
Weighted
average
number of
shares
outstanding
Basic 381,274 330,114 361,229 290,335
Diluted 386,951 355,721 366,377 315,881

The accompanying notes form an integral part of these unaudited
consolidated financial statements.


Consolidated Balance Sheets
(US dollars in thousands - Unaudited)

June 30 December 31
Note 2006 2005
--------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 264,609 $ 562,188
Marketable securities
(market value: $12,132;
2005 $16,086) 8,236 11,264
Accounts receivable 150,671 75,160
Inventories and stockpiled ore 121,366 77,182
Future income and mining taxes 19,258 26,558
Income and mining taxes receivable 2,912 2,774
Other 18,526 17,225
--------------------------------------------------------------------
585,578 772,351
Mining interests 5 5,159,619 2,980,762
Silver contracts 6 355,051 74,639
Goodwill 5 689,579 142,654
Long-term investments
(market value: $103,365;
2005 $41,056) 90,483 33,563
Stockpiled ore 65,965 51,063
Other 23,194 10,950
--------------------------------------------------------------------
$ 6,969,469 $ 4,065,982
--------------------------------------------------------------------
--------------------------------------------------------------------

Liabilities
Current
Accounts payable and
accrued liabilities $ 175,847 $ 97,523
Income and mining
taxes payable 86,650 93,287
Current portion of
long-term debt 7 100,000 -
Current derivative
instrument liability 8 6,539 -
--------------------------------------------------------------------
369,036 190,810
Derivative instrument liability 8 5,241 -
Future income and mining taxes 1,303,836 728,079
Long-term debt 7 750,000 -
Reclamation and closure cost
obligations 138,052 57,724
Future employee benefits and other 8,205 7,005
--------------------------------------------------------------------
2,574,370 983,618
--------------------------------------------------------------------
Non-controlling interests 9 253,842 108,601
--------------------------------------------------------------------
Shareholders' Equity 10
Capital stock 3,571,208 2,653,751
Cumulative translation adjustment 101,927 101,927
Retained earnings 468,122 218,085
--------------------------------------------------------------------
4,141,257 2,973,763
--------------------------------------------------------------------
$ 6,969,469 $ 4,065,982
--------------------------------------------------------------------
--------------------------------------------------------------------

Commitments (note 13)
Subsequent event (note 14)

The accompanying notes form an integral part of these unaudited
consolidated financial statements.


Consolidated Statements of Cash Flows
(US dollars in thousands - Unaudited)

Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
Note 2006 2005 2006 2005
--------------------------------------------------------------------
Operating
activities
Net earnings $ 190,409 $ 98,030 $ 282,810 $ 127,519
Reclamation
expenditures (2,207) (1,415) (3,469) (1,526)
Items not
affecting
cash
Depreciation
and
depletion 73,161 40,313 118,928 57,892
Stock option
expense 5,800 2,156 9,199 7,476
(Gain)
loss on
marketable
securities,
net 167 1,147 (2,388) (1,444)
Future
income
and mining
taxes 2,444 (6,225) (754) (2,119)
Future
employee
benefits 604 1,704 1,213 2,735
Non-
controlling
interests 10,538 3,201 16,203 7,406
Dilution
gain (61,095) - (61,095) -
Non-hedge
derivative
loss 11,780 - 11,780 -
Other 7,325 2,924 7,224 2,642
Change in
non-cash
operating
working
capital 11 1,195 22,035 (65,176) 43,533
--------------------------------------------------------------------
Net cash
provided by
operating
activities 240,121 163,870 314,475 244,114
--------------------------------------------------------------------
Investing
activities
Mining
interests 12 (96,621) (68,352) (163,377) (116,621)
Acquisitions 11 (1,347,681) (8,172) (1,606,193) 62,436
Silver
contracts 6 (40,000) - (285,289) -
Long-term
investments (22,746) - (56,920) -
Purchase of
marketable
securities (44) (5,268) (44) (8,205)
Proceeds from
sale of
marketable
securities 858 4,801 6,082 15,479
Other (2,026) (176) (3,987) (187)
--------------------------------------------------------------------
Net cash used
in investing
activities (1,508,260) (77,167) (2,109,728) (47,098)
--------------------------------------------------------------------
Financing
activities
Long-term debt
borrowings,
net of
repayments 7 730,000 - 850,000 -
Debt issue
costs (1,746) - (2,812) -
Common shares
issued, net 478,630 12,231 506,144 13,340
Shares issued
by subsidiary
to non-
controlling
interests 171,742 120 175,152 3,312
Dividends
paid to
common
shareholders (17,425) (15,213) (32,773) (120,518)
--------------------------------------------------------------------
Net cash
provided by
(used in)
financing
activities 1,361,201 (2,862) 1,495,711 (103,866)
--------------------------------------------------------------------
Effect of
exchange rate
changes on
cash and cash
equivalents 1,951 (1,964) 1,963 (5,682)
--------------------------------------------------------------------
Increase
(decrease)
in cash and
cash
equivalents 95,013 81,877 (297,579) 87,468
Cash and
cash
equivalents,
beginning of
period 169,596 338,966 562,188 333,375
--------------------------------------------------------------------
Cash and cash
equivalents,
end of period $ 264,609 $ 420,843 $ 264,609 $ 420,843
--------------------------------------------------------------------
--------------------------------------------------------------------

Cash and cash
equivalents
is comprised of:
Cash $ 128,631 $ 49,372
Short-term
money market
investments 135,978 371,471
--------------------------------------------------------------------
$ 264,609 $ 420,843
--------------------------------------------------------------------
--------------------------------------------------------------------

The accompanying notes form an integral part of these unaudited
consolidated financial statements.


Consolidated Statements of Shareholders' Equity
(US dollars, shares and warrants in thousands - Unaudited)

Capital Stock
------------------------------------------------
Common Shares Share
---------------------- Purchase Stock
Shares Amount Warrants Options
--------------------------------------------------------------------
At January 1,
2005 189,980 $ 363,246 $ 16,110 $ 7,347
Issued pursuant
to Wheaton
acquisition 143,771 1,887,431 290,839 30,794
Stock options
exercised and
restricted share
units issued 2,556 32,224 - (7,647)
Share purchase
warrants
exercised 3,335 39,824 (20,121) -
Fair value of
stock options
issued and
vested, and
restricted
share units
vested - - - 13,938
Share issue costs - (234) - -
Dividends
declared - - - -
Unrealized loss
on translation
of non-US dollar
denominated
accounts - - - -
Net earnings - - - -
--------------------------------------------------------------------
At December 31,
2005 339,642 $ 2,322,491 $ 286,828 $ 44,432
Issued pursuant
to acquisition
of Virginia
Gold Mines Inc. 19,310 398,332 3,585 -
Stock options
exercised and
restricted share
units issued 4,873 70,808 - (16,091)
Share purchase
warrants
exercised 54,208 745,343 (287,102) -
Fair value of
new warrants
issued (38,932) 38,932 -
Fair value of
stock options
issued and
vested, and
restricted
share units
issued and
vested - - - 7,739
Share issue costs - (5,157) - -
Dividends
declared - - - -
Net earnings - - - -
--------------------------------------------------------------------
At June 30,
2006 418,033 $ 3,492,885 $ 42,243 $ 36,080
--------------------------------------------------------------------
--------------------------------------------------------------------


Cumulative
Translation Retained
Adjustment Earnings Total
--------------------------------------------------------------------
At January 1,
2005 $ 107,741 $ 83,405 $ 577,849
Issued pursuant
to Wheaton
acquisition - - 2,209,064
Stock options
exercised and
restricted share
units issued - - 24,577
Share purchase
warrants
exercised - - 19,703
Fair value of
stock options
issued and
vested, and
restricted
share units
vested - - 13,938
Share issue costs - - (234)
Dividends
declared - (151,018) (151,018)
Unrealized loss
on translation
of non-US dollar
denominated
accounts (5,814) - (5,814)
Net earnings - 285,698 285,698
--------------------------------------------------------------------
At December 31,
2005 $ 101,927 $ 218,085 $2,973,763
Issued pursuant
to acquisition
of Virginia
Gold Mines Inc. - - 401,917
Stock options
exercised and
restricted share
units issued - - 54,717
Share purchase
warrants
exercised - - 458,241
Fair value of
new warrants
issued - - -
Fair value of
stock options
issued and
vested, and
restricted
share units
issued and
vested - - 7,739
Share issue costs - - (5,157)
Dividends
declared - (32,773) (32,773)
Net earnings - 282,810 282,810
--------------------------------------------------------------------
At June 30,
2006 $ 101,927 $ 468,122 $4,141,257
--------------------------------------------------------------------
--------------------------------------------------------------------

Shareholders' Equity (note 10)

The accompanying notes form an integral part of these unaudited
consolidated financial statements.


(in United States dollars, tabular amounts in thousands, except where noted - Unaudited)

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2006

1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Goldcorp Inc ("Goldcorp" or "the Company") is a leading gold producer engaged in gold mining and related activities including exploration, extraction, processing and reclamation. As a result of the 2005 acquisition of Wheaton River Minerals Ltd ("Wheaton"), the Company's assets are comprised of the Red Lake gold mine in Canada, a 37.5% interest in the Alumbrera gold/copper mine in Argentina, the Luismin gold/silver mines in Mexico, the Amapari gold mine in Brazil, the Peak gold mine in Australia, and the Wharf gold mine in the United States. Significant development projects include the expansion of the existing Red Lake mine, Los Filos gold project in Mexico and the Eleonore gold project in Canada (note 3). Goldcorp also owns a 57% interest in Silver Wheaton Corp ("Silver Wheaton"), a publicly traded silver mining company (note 9). In addition, on May 12, 2006, the Company acquired certain assets from Barrick Gold Corporation ("Barrick") following Barrick's acquisition of Placer Dome Inc. ("Placer Dome"), including Placer Dome's interests in the Campbell, Porcupine and Musselwhite gold mines in Canada, the La Coipa gold/silver mine in Chile, and the Pueblo Viejo development project in Dominican Republic (note 4).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These unaudited interim consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). The preparation of financial data is based on accounting policies and practices consistent with those used in the preparation of the audited annual consolidated financial statements. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the notes to the Company's audited consolidated financial statements for the year ended December 31, 2005, as they do not contain all disclosures required by Canadian GAAP for annual financial statements.

In the opinion of management, all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2006, and for all periods presented, have been made. The interim results are not necessarily indicative of results for a full year.

(a) Basis of presentation and principles of consolidation

These unaudited interim consolidated financial statements include the accounts of the Company and all of its subsidiaries and investments.

The principal mining properties of Goldcorp at June 30, 2006, are listed below:



Operations
Mining Ownership and development
properties Location interest Status projects owned
---------------------------------------------------------------------
Red Lake mines Canada 100% Consolidated Red Lake and
("Red Lake") Campbell complexes
(2)

Minera Argentina 37.5% Proportionately Alumbrera mine
Alumbrera Ltd. consolidated
("Alumbrera")
(1)

Musselwhite Canada 68% Proportionately Musselwhite mine
mine consolidated
("Musselwhite")
(2)

Porcupine Canada 51% Proportionately Porcupine mine
Joint Venture consolidated
("Porcupine")
(2)

Luismin Mexico 100% Consolidated San Dimas,
SA de CV San Martin and
("Luismin") Nukay mines and
(1) Los Filos gold
project

Mineracao Brazil 100% Consolidated Amapari mine
Pedra Branco
do Amapari Ltda
("Amapari")
(1)

Peak Gold Australia 100% Consolidated Peak mine
Mines Pty Ltd
("Peak")
(1)

Wharf United 100% Consolidated Wharf mine
gold mine States
("Wharf")

La Coipa mine Chile 50% Proportionately La Coipa mine
("La Coipa") consolidated
(2)

Les Mines Canada 100% Consolidated Eleonore gold
Opinaca Ltee project
("Eleonore")
(3)

Silver Canada 57% Consolidated Silver contracts
Wheaton Corp in Mexico, Sweden
("Silver and Peru
Wheaton")
(1) (4)

Pueblo Viejo Dominican 40% Equity Pueblo Viejo gold
mine Republic investment project
("Pueblo Viejo")
(2)

(1) The results of Goldcorp include an 82% interest in the
subsidiaries and investments of Wheaton from February 15 to
April 15, 2005 and 100% thereafter.

(2) The results of Goldcorp include the acquired Placer Dome assets
from Barrick from May 12, 2006 onward (note 4).

(3) The results of Goldcorp include Eleonore gold project from
March 31, 2006, the date of acquisition, onwards (note 3).

(4) On April 20, 2006, Goldcorp's interest in Silver Wheaton was
diluted to 57% upon the issuance of equity by Silver Wheaton
to non-controlling interests (note 9).


All intercompany transactions and balances have been eliminated.

(b) Comparative amounts

Certain comparative information has been reclassified to conform to the current period's presentation.

3. ASSET ACQUISITION - ELEONORE GOLD PROJECT

On March 31, 2006, the Company completed the acquisition of the Eleonore gold project and Virginia Gold Mines Inc ("Virginia").

Goldcorp issued 19.3 million common shares at a price of $20.63 per share. This issue price is the five-day average share price of Goldcorp common shares at December 5, 2005, the date of announcement. Total value allocated to mining interests including a future income tax adjustment, equals $702 million.

Under the agreement, shareholders of Virginia received 0.4 of a Goldcorp common share and 0.5 of a share in a new public exploration company (Virginia Mines Inc "New Virginia") for each issued and outstanding Virginia share. New Virginia holds all other assets of Virginia including net working capital, cash received prior to closing from the exercise of Virginia options and warrants, non-Eleonore exploration assets, and a sliding scale 2% net smelter return royalty on the Eleonore project.

4. BUSINESS COMBINATION - PLACER DOME MINING ASSETS

On October 30, 2005, Goldcorp entered into an agreement with Barrick to acquire certain of Placer Dome's Canadian and other mining assets and interests upon Barrick's successful acquisition of Placer Dome. On March 15, 2006, Barrick acquired 100% of the outstanding shares of Placer Dome for approximately $10.0 billion in shares and cash. On May 12, 2006, Goldcorp completed the agreement with Barrick for cash of approximately $1.6 billion. The acquisition was funded with a $250 million advance payment paid in January 2006 from cash on hand. The remainder was paid upon closing by drawing down on credit facilities (note 7) in the amount of $1.3 billion and cash on hand. Goldcorp has acquired Placer Dome's interests in the Campbell (100%), Porcupine (51%) and Musselwhite (68%) gold mines in Canada, and the La Coipa (50%) gold/silver mine in Chile. Goldcorp has also acquired a 40% interest in the Pueblo Viejo gold development project in the Dominican Republic, together with Placer Dome's interests in its Canadian exploration properties, including the Mount Milligan copper/gold deposit in British Columbia. On July 24, 2006, Goldcorp sold certain of its Canadian exploration interests to Terrane Metals Corp (note 14).

This business combination has been accounted for as a purchase transaction, with Goldcorp being identified as the acquirer and the Placer Dome operations as the acquiree. These interim unaudited consolidated financial statements include the Placer Dome operating results for the period May 12, 2006 to June 30, 2006. The preliminary allocation of the purchase price of the Placer Dome operations is summarized in the following table and is subject to adjustment:



Purchase price, subject to final adjustments
Cash $ 1,589,932
Acquisition costs 9,910
-------------------------------------------------------
$ 1,599,842
-------------------------------------------------------
-------------------------------------------------------

Net assets acquired
Current assets $ 54,799
Other assets 13,546
Mining interest 1,389,775
Current liabilities (56,342)
Future income tax liabilities (273,641)
Reclamation and closure cost obligations (80,690)
Goodwill 552,395
-------------------------------------------------------
$ 1,599,842
-------------------------------------------------------
-------------------------------------------------------


For the purposes of these interim unaudited consolidated financial statements, the purchase consideration has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed, with goodwill assigned to a specific reporting unit, based on management's best estimates and taking into account all available information at the time of acquisition as well as applicable information at the time these interim unaudited consolidated financial statements were prepared. Goldcorp will continue to review information and perform further analysis with respect to these assets, including an independent valuation, prior to finalizing the allocation of the purchase price. This process will be performed in accordance with the recent accounting pronouncement relating to "Mining Assets - Impairment and Business Combination" (Emerging Issue Committee Abstract 152). Although the results of this review are presently unknown, it is anticipated that it may result in a change to the amount assigned to goodwill and a change to the value attributable to tangible assets.

5. MINING INTERESTS



June 30, 2006 December 31, 2005
------------------------------ ------------------------------
Accumu- Accumu-
lated lated
deprecia- deprecia-
tion tion
and and
deplet- deplet-
Cost ion Net Cost ion Net
---------------------------------------------------------------------
Mining
proper-
ties $4,436,877 $303,583 $4,133,294 $2,532,984 $205,223 $2,327,761
Plant
and
equip-
ment 1,182,916 156,591 1,026,325 794,895 141,894 653,001
---------------------------------------------------------------------
$5,619,793 $460,174 $5,159,619 $3,327,879 $347,117 $2,980,762
---------------------------------------------------------------------
---------------------------------------------------------------------


A summary by property of the net book value is as follows:



Mining properties
------------------------------
Plant
Non- and
Deplet- deplet- equip- June 30 Dec 31
able able Total ment 2006 2005
---------------------------------------------------------------------
Red
Lake
(iii)$322,893 $256,946 $579,839 $198,320 $778,159 $289,492
Alumbrera
mine 412,800 - 412,800 275,953 688,753 724,663
Luismin
mines
(ii) 176,380 607,198 783,578 86,765 870,343 842,670
Amapari
mine 64,278 120,883 185,161 85,018 270,179 268,732
Peak
mine 38,594 103,767 142,361 25,978 168,339 169,025
Los
Filos
project - 367,611 367,611 118,439 486,050 421,820
El Limon
and
other
projects,
Mexico - 254,217 254,217 1,995 256,212 256,212
Wharf
mine 4,153 - 4,153 - 4,153 6,185
Eleonore
gold
project - 705,113 705,113 - 705,113 -
Porc-
upine
(iii) 6,449 25,782 32,231 97,972 130,203 -
Mussel-
white
(iii) 75,011 47,569 122,580 72,133 194,713 -
La
Coipa
(iii) 55,709 136,760 192,469 61,690 254,159 -
Pueblo
Viejo
(i,
iii) - 188,933 188,933 - 188,933 -
Canadian
explora-
tion
proper-
ties
(iii) - 161,290 161,290 - 161,290 -
Corporate
and
other 958 - 958 2,062 3,020 1,963
---------------------------------------------------------------------
$1,157,225 $2,976,072 $4,133,294 $1,026,325 $5,159,619 $2,980,762
---------------------------------------------------------------------
---------------------------------------------------------------------

(i) Equity investment

(ii) Included in the carrying value of Luismin mines is the value of
mining properties attributable to the Silver Wheaton silver
contract of the following amounts:

Mining properties
----------------------------------
Plant
Non- and
Deplet- deplet- equip- June 30 Dec 31
able able Total ment 2006 2005
---------------------------------------------------------------------
Silver
interests
(note
9) $ 56,534 $ 158,787 $ 215,321 - $ 215,321 $ 200,021


(iii) The net book values have been allocated on a preliminary basis
according to the fair value of the Placer Dome mining assets acquired,
which may result in a change to the amount assigned to goodwill and a
change to the value attributable to tangible assets upon finalization
of the purchase price.

The goodwill allocated to the Company's reporting units and included in the respective operating segment assets is shown below:



June 30 Dec 31
2006 2005
---------------------------------------------------------------------
Red Lake (iii) $ 552,395 $ -
Luismin 74,252 74,252
Silver
Wheaton 62,932 68,402
---------------------------------------------------------------------
$ 689,579 $ 142,654
---------------------------------------------------------------------
---------------------------------------------------------------------


6. SILVER CONTRACTS



June 30, 2006 December 31, 2005
--------------------------- --------------------------
Accumu- Accumu-
lated lated
amortiza- amortiza-
Cost tion Net Cost tion Net
--------------------------------------------------------------------
Zinkgruvan $ 77,919 $ 4,928 $ 72,991 $ 77,919 $ 3,280 $ 74,639
Yauliyacu 285,292 3,232 282,060 - - -
--------------------------------------------------------------------
$363,211 $ 8,160 $355,051 $ 77,919 $ 3,280 $ 74,639
--------------------------------------------------------------------
--------------------------------------------------------------------


(a) On March 23, 2006, Silver Wheaton entered into an agreement to purchase 4.75 million ounces of silver per year for a period of 20 years, based on the production from Glencore International AG's ("Glencore") Yauliyacu mining operations in Peru, for an upfront payment of $285 million, comprised of $245 million in cash and a $40 million promissory note (note 7). In addition, a cash payment of $3.90 per ounce of silver delivered under the contract is due (subject to an inflationary adjustment commencing in 2009).

(b) Silver Wheaton has an agreement to purchase all of the silver produced by Lundin Mining Corporation's Zinkgruvan mine in Sweden for a per ounce cash payment of the lesser of $3.90 and the prevailing market price, subject to adjustment. The carrying value of the silver contract at June 30, 2006 is $72,991,000 which is being amortized to operations on a unit-of-sale basis.

7. BANK CREDIT FACILITIES AND PROMISSORY NOTES

(a) In 2005, Goldcorp entered into a $500 million revolving credit facility with a syndicate of five lenders. The facility is unsecured and available to finance acquisitions and for general corporate purposes. Amounts drawn incur interest at LIBOR plus 0.625% to 1.125% per annum dependent upon the Company's leverage ratio, increasing by an additional 0.125% per annum if the total amount drawn under this facility exceeds $250 million. Undrawn amounts are subject to a 0.15% to 0.25% per annum commitment fee dependent on the Company's leverage ratio. All amounts drawn are required to be refinanced or repaid by July 29, 2010. As at June 30, 2006, this facility was fully drawn to fund the acquisition of certain Placer Dome assets (note 4).

(b) On May 12, 2006, the Company entered into two credit facilities comprising of a $550 million bridge facility and a $350 million revolving credit facility. Both facilities are unsecured, and amounts drawn down will incur interest at LIBOR plus 0.625% to 1.125% per annum dependent upon the Company's leverage ratio, increasing by an additional 0.125% per annum if the total amount drawn under either facility exceeds 50% of the facility amount. Undrawn amounts will be subject to a 0.15% to 0.25% per annum commitment fee dependent on the Company's leverage ratio. Proceeds raised from the early exercise of the warrants (note 10(a)) are required to repay the $550 million bridge facility and repayment may not be reborrowed. Amounts drawn on the $350 million facility will be required to be refinanced or repaid by May 11, 2008. As at June 30, 2006, $250 million of debt is outstanding on the $350 million credit facility. Debt of $100 million is outstanding on the bridge facility which is required to be repaid by May 9, 2007.

(c) The Company has an Aus$5,000,000 ($3,711,000), unsecured, revolving working capital facility for its Peak mine operations of which $nil was drawn down at June 30, 2006. The loan bears interest related to the Australian Treasury Bill rate plus 1.5% per annum.

(d) In March 2006, Silver Wheaton entered into a credit agreement comprising a $100 million non-revolving term loan (the "Term Loan") and a $25 million revolving loan (the "Revolving Loan"). The Revolving Loan is for a period of five years and the Term Loan is to be repaid in equal installments over a period of four years, however, prepayments are allowed at any time. The interest rate on each of these loans is based on LIBOR plus a spread determined by Silver Wheaton's leverage ratio. Both the Term Loan and the Revolving Loan are secured against Silver Wheaton's assets including the Luismin, Zinkgruvan and Yauliyacu silver purchase contracts. The facility was fully repaid as at June 30, 2006 from the proceeds of a C$200 million public offering completed by Silver Wheaton on April 20, 2006 (note 9).

(e) On March 23, 2006, as partial consideration for entering into the Yauliyacu silver purchase contract (note 6), Silver Wheaton issued a $40 million promissory note to Glencore, bearing interest at 3% per annum and due on July 21, 2006. The promissory note was repaid from the proceeds of the public offering completed by Silver Wheaton on April 20, 2006 (note 9).

8. DERIVATIVE INSTRUMENTS

Commencing in April 2006, the Company uses copper forward contracts to mitigate the risk of copper price changes on copper sales at the Alumbrera Mine. These contracts do not meet the definition of an effective hedge and consequently changes in the fair values of these contracts are recorded in earnings.
The Company entered into 66 million pounds of copper forward contracts on its 2007 production at a blended rate of $2.91 per pound and also entered into 30 million pounds of copper forward contracts on its 2008 production at a blended rate of $2.55 per pound. All contracts are monthly swaps, cash settled, based on the London Metal Exchange Cash Settlement price for the month. The fair value of these contracts resulted in a $6,539,000 current liability and a $5,241,000 long-term liability as at June 30, 2006. The loss in fair value of these contracts in the amount of $11,780,000 has been recognized in earnings during the period.

9. NON-CONTROLLING INTERESTS

As a result of the Wheaton acquisition on February 14, 2005, Goldcorp acquired Wheaton's 65% ownership of its subsidiary, Silver Wheaton. This interest decreased to 59% in December 2005 following the issuance of additional shares by Silver Wheaton to non-controlling interests. On March 30, 2006, Goldcorp and Silver Wheaton amended the silver purchase contract, increasing the minimum number of ounces of silver to be delivered over the 25 year period by 100 million ounces, to 220 million ounces, and waiving any capital expenditure contributions previously required to be paid by Silver Wheaton. In consideration for these amendments, Silver Wheaton issued to Goldcorp 18 million common shares, valued at the February 13, 2006 closing price of $6.42 per share, and a $20 million non-interest bearing promissory note due on March 30, 2007. As a result, at March 30, 2006, Goldcorp owned 62% of Silver Wheaton's common shares. This transaction resulted in an increase to mining interests of $46,613,000, an increase to future income tax liabilities of $14,290,000, and an increase in non-controlling interests of $32,323,000.

On April 20, 2006, Silver Wheaton closed a C$200 million public offering of 16.7 million common shares at a price of C$12.00 per share. This transaction resulted in a decrease in Goldcorp's ownership in Silver Wheaton from 62% to 57%. This dilution of the Company's interest gave rise to an increase in non-controlling interest of $93,305,000 and a dilution gain of $61,095,000, which has been recognized in earnings for the current quarter.

The detail of this non-controlling interest in Silver Wheaton is as follows:



At January 1, 2006 $ 108,601
Shares issued to
non-controlling interests, net $ 3,410
Add: increase in net assets
attributable to Goldcorp 32,323 35,733
-------------------------
144,334
Shares issued to
non-controlling interests, net $ 171,472
Less: decrease in net assets
attributable to Goldcorp (98,128)
Add: book value of dilution
of Goldcorp's share of net assets 19,961 93,305
-------------------------
237,639
Share of net earnings of Silver Wheaton 16,203
--------------------------------------------------------------------
At June 30, 2006 $ 253,842
--------------------------------------------------------------------
--------------------------------------------------------------------


10. SHAREHOLDERS' EQUITY



June 30 December 31
2006 2005
--------------------------------------------------------------------
Common shares $ 3,492,885 $ 2,322,491
Share purchase warrants (a) 42,243 286,828
Stock options (b) 36,080 44,432
--------------------------------------------------------------------
$ 3,571,208 $ 2,653,751
--------------------------------------------------------------------
--------------------------------------------------------------------


At June 30, 2006, the Company had 418,033,000 common shares outstanding (December 31, 2005 - 339,642,000). Refer to the Consolidated Statements of Shareholders' Equity for movement in capital stock.

(a) Share Purchase Warrants

On March 21, 2006, the Company proposed the issuance of new common share purchase warrants ("New Warrants") in exchange for the early exercise of the five existing series of warrants ("Existing Warrants"). On June 12, 2006, over 92% of Existing Warrant holders had exercised their warrants during the early exercise period giving rise to net proceeds of $454.9 million which were subsequently used to pay down credit facilities drawn down to fund the previously completed acquisition of certain assets of Placer Dome from Barrick (note 7). Pursuant to this transaction, the remaining Existing Warrant holders had their warrants automatically exchanged, without any further action on the part of the warrant holder (including payment of any consideration), for (i) a fraction of a common share equivalent in value to the intrinsic (in-the-money) value of such Existing Warrant calculated with reference to the price of Goldcorp common shares for the five trading days immediately preceding the expiry of the early exercise period, and (ii) one half of the fraction of a New Warrant issued to holders of Existing Warrants who exercised during the early exercise period.

Each of the 8,441,000 New Warrants issued by the Company entitles the holder to purchase at any time one common share of Goldcorp at an exercise price of C$45.75 until June 9, 2011. The New Warrants trade on the Toronto Stock Exchange and the New York Stock Exchange.

All Existing Warrants were de-listed from the Toronto and New York stock exchanges.

As at June 30, 2006, as a result of the Virginia acquisition (note 3), there also exist 695,000 Virginia warrants convertible into 277,000 Goldcorp shares at an average exercise price of $4.81, with expiration dates of September 11, 2006.

(b) Stock Options

The Company has a 2005 Stock Option Plan which allows for up to 12.5 million stock options, with a maximum exercise period of ten years, to be granted to employees, officers and consultants. Of the 11,967,000 outstanding stock options at June 30, 2006, 8,113,000 relate to options granted under the 2005 Stock Option Plan.

The Company granted 2,661,000 stock options during the three months ended June 30, 2006, which vest over a period of three years, are exercisable at prices ranging from C$30.95 to C$33.60 per option, expire in 2016, and have a total fair value of $19,868,000. During the first quarter of 2006, the Company granted 595,000 stock options which vest over a period of three years, are exercisable at prices ranging from C$28.84 to C$30.55 per option, expire in 2016, and have a total fair value of $3,969,000.

The fair value of the options on the date of grant is determined by using an option pricing model with the following weighted average assumptions: risk-free interest rate of 4.5%, dividend yield of less than 1%, volatility factor of 30%, and an expected life of the options of four years. The fair value of the options is expensed over the vesting period of the options.

Compensation expense of $4,231,000 has been recognized during the quarter (six months ended June 30, 2006 - $7,443,000). In addition stock option expense of $963,000 was recognized by Silver Wheaton during the quarter (six months ended June 30, 2006 - $1,074,000).

A summary of changes in outstanding stock options is as follows:



Weighted
Average
Exercise
Outstanding Price
--------------------------------------------------------------------
At January 1, 2005 6,144 C$13.98
Issued in connection
with acquisition of Wheaton 4,917 9.52
Granted 5,095 19.31
Exercised (2,545) 10.11
Cancelled (34) 17.66
--------------------------------------------------------------------
At December 31, 2005 13,577 15.08
Granted 3,256 30.94
Exercised (4,852) 12.86
Cancelled (14) 23.39
--------------------------------------------------------------------
At June 30, 2006 11,967 20.28
--------------------------------------------------------------------
--------------------------------------------------------------------


The following table summarizes information about the options outstanding at June 30, 2006:



Options Outstanding Options Exercisable
---------------------------- --------------------------
Weighted
Weighted Options Average
Average Outstand- Remain-
Remaining ing ing
Options Weighted Contract- and Weighted Contrac-
Outstand- Average ual Exercis- Average tual
Exercise ing Exercise Life able Exercise Life
Prices (C$) (000's) Price (years) (000's) Price (years)
--------------------------------------------------------------------
$2.05 -
$4.98 366 C$3.64 2.7 366 C$3.64 2.7
$5.60 -
$7.68 517 6.49 2.0 517 6.49 2.0
$11.40 -
$14.80 1,781 12.95 3.1 1,781 12.95 3.1
$15.00 -
$18.50 1,147 17.09 7.4 1,147 17.09 7.4
$19.06 -
$19.46 4,806 19.23 9.0 2,027 19.23 9.0
$23.39 -
$23.80 94 23.44 9.1 19 23.44 9.1
$28.84 -
$30.95 3,006 30.71 9.9 - 30.71 9.9
$33.60 250 33.60 9.9 - 33.60 9.9
--------------------------------------------------------------------
11,967 C$20.28 7.7 5,857 C$14.81 5.9
--------------------------------------------------------------------
--------------------------------------------------------------------


(c) Restricted Share Units

The Company has a Restricted Share Unit Plan which allows for up to 500,000 restricted share units ("RSU's") to be granted to employees, directors and consultants.

A total of 61,500 RSU's have been issued to an employee and non-executive directors of the Company during the six months ended June 30, 2006 (six months ended June 30, 2005 - 31,500). These instruments vest over a period of up to three years from the grant date.

The Company will record compensation expense totaling $2,151,000 over the vesting periods. Compensation expense of $606,000 has been recognized during the second quarter (six months ended June 30, 2006 - $682,000).

(d) Diluted Earnings per Share

The following table sets forth the computation of diluted earnings per share:



Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
2006 2005 2006 2005
--------------------------------------------------------------------
Earnings
available to
common
shareholders $ 190,409 $ 98,030 $ 282,810 $ 127,519
--------------------------------------------------------------------
--------------------------------------------------------------------
Basic weighted -
average number
of shares
outstanding 381,274 330,114 361,229 290,335
Effect of
dilutive
securities:
Stock options 5,013 3,117 4,492 3,106
Warrants 605 22,458 598 22,408
Restricted
share units 59 32 59 32
--------------------------------------------------------------------
Diluted weighted -
average number
of shares
outstanding 386,951 355,721 366,377 315,881
--------------------------------------------------------------------
--------------------------------------------------------------------

Earnings per share
Basic $ 0.50 $ 0.30 $ 0.78 $ 0.44
Diluted $ 0.49 $ 0.28 $ 0.77 $ 0.40


In the six months ended June 30, 2006, 8441,000 share purchase warrants were excluded from the computation of diluted earnings per share because the exercise prices exceeded the average fair market value of the common shares for the period (six months ended June 30, 2005 - 6,762,000 stock options).

11. SUPPLEMENTAL CASH FLOW INFORMATION



Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
Note 2006 2005 2006 2005
--------------------------------------------------------------------
Change in
non-cash
operating
working
capital
Accounts
receivable (31,971) 5,093 (67,571) 2,553
Income and
mining taxes
receivable (138) 2,013 (138) 12,269
Inventories
and
stockpiled
ore 10,761 (9,384) 561 (5,568)
Accounts
payable and
accrued
liabilities 16,524 (15,710) 19,526 (8,404)
Income and
mining taxes
payable 5,790 3,855 (18,288) 6,501
Other 229 36,168 734 36,182
--------------------------------------------------------------------
$ 1,195 $ 22,035 $ (65,176) $ 43,533
--------------------------------------------------------------------
--------------------------------------------------------------------

Acquisitions,
net of cash
acquired
Placer Dome 4 (1,347,681) - (1,599,842) -
Virginia
Gold Mines 3 - - (6,351) -
Wheaton - (8,172) - 132,446
Bermejal - - - (70,010)
--------------------------------------------------------------------
$(1,347,681) $ (8,172) $(1,606,193) $ 62,436
--------------------------------------------------------------------
--------------------------------------------------------------------


Three Months Ended Six Months Ended
June 30 June 30 June 30 June 30
2006 2005 2006 2005
--------------------------------------------------------------------
Non-cash
financing
and investing
activities
New Warrants
issued on
the early
exercise of
Existing
Warrants $ 38,932 $ - $ 38,932 $ -
Shares and
warrants
issued on
acquisition
of Virginia - - 401,917 -
Silver Wheaton
promissory
note issued
to Glencore - - 40,000 -
Shares
issued on
acquisition
of Wheaton - 333,421 - 1,887,421
Warrants
issued in
exchange for
those of
Wheaton - 50,839 - 290,839
Stock options
issued in
exchange for
those of
Wheaton - 12,794 - 30,794

Operating
activities
included the
following
cash payments
Interest
paid $ 7,206 $ - $ 7,381 $ -
Income taxes
paid 64,602 58,317 138,887 58,406


12. SEGMENTED INFORMATION

The Company's reportable operating segments are summarized in the table below.



Three Months Ended June 30, 2006


Depreciation Earnings Expenditures
and (loss) from for mining
Revenues depletion operations interests
--------------------------------------------------------------------
Red Lake(1) $ 93,767 $ 9,453 $ 53,456 $ 25,683
Alumbrera 229,962 24,442 143,517 5,236
Luismin 44,096 12,582 13,302 49,109
Amapari 12,340 3,817 (6,677) 3,341
Peak 22,919 3,730 7,127 3,056
Wharf 9,747 2,339 1,841 148
Eleonore - - - 3,514
Silver Wheaton 47,413 6,959 24,350 (4
Porcupine(1) 15,340 2,212 3,402 3,261
Musselwhite(1) 15,074 2,276 1,864 1,594
La Coipa(1) 10,370 5,110 (1,539) 382
Corporate and
Eliminations (9,544) 241 (15,306) 1,301
--------------------------------------------------------------------
$ 491,484 $ 73,161 $ 225,337 $ 96,621
--------------------------------------------------------------------
--------------------------------------------------------------------


Six Months Ended June 30, 2006

Earnings Expendi-
Deprecia- (loss) tures Total
tion from for assets
and opera- mining June 30
Revenues depletion tions interests 2006
--------------------------------------------------------------------
Red Lake(1) $ 161,150 $ 14,408 $ 97,849 $ 43,985 $ 1,005,126
Alumbrera 354,929 43,081 221,945 7,170 980,972
Luismin 78,303 21,685 22,297 86,484 1,484,139
Amapari 24,910 7,504 (9,671) 8,985 295,195
Peak 45,530 8,431 14,216 6,413 191,907
Wharf 17,023 3,595 3,795 213 29,396
Eleonore - - - 3,514 704,619
Silver Wheaton 73,124 10,385 35,652 - 750,612
Porcupine(1) 15,340 2,212 3,402 3,261 152,008
Musselwhite(1) 15,074 2,276 1,864 1,594 216,685
La Coipa(1) 10,370 5,110 (1,539) 382 381,451
Pueblo Viejo(1) - - - - 188,933
Canadian
exploration
properties(1) - - - - 161,290
Corporate and
Eliminations (18,012) 241 (20,536) 1,376 427,236
--------------------------------------------------------------------
$ 777,741 $ 118,928 $ 369,274 $ 163,377 $ 6,969,469
--------------------------------------------------------------------
--------------------------------------------------------------------


Three Months Ended June 30, 2005

Deprecia-
tion Earnings Expenditures
and (loss) from for mining
Revenues depletion operations interests
--------------------------------------------------------------------
Red Lake $ 176,939 $ 14,923 $ 129,144 $ 8,182
Alumbrera(2) 65,612 14,921 26,323 1,729
Luismin(2) 25,559 5,307 3,328 25,319
Amapari(2) - - - 28,683
Peak(2) 12,326 2,482 2,138 4,171
Wharf 7,014 1,595 627 242
Silver Wheaton(2) 19,263 1,736 6,560 -
Corporate and
Eliminations(2) (5,108) (651) (5,710) 26
--------------------------------------------------------------------
$ 301,605 $ 40,313 $ 162,410 $ 68,352
--------------------------------------------------------------------
--------------------------------------------------------------------


Six Months Ended June 30, 2005

Earnings Expendi-
Depre- (loss) tures Total
ciation from for assets
and deple- opera- mining Dec. 31
Revenues tion tions interests 2005
--------------------------------------------------------------------
Red Lake $ 232,926 $ 19,741 $ 168,320 $ 29,184 $ 297,794
Alumbrera(2) 86,796 18,855 35,337 2,065 931,291
Luismin(2) 39,387 7,613 6,728 36,453 1,446,958
Amapari(2) - - - 38,930 288,265
Peak(2) 20,354 3,337 3,846 7,894 146,362
Wharf 21,952 4,671 2,653 2,001 41,878
Silver
Wheaton(2) 30,120 2,635 10,454 - 478,962
Corporate and
Eliminations(2) (7,080) 1,040 (11,232) 94 434,472
--------------------------------------------------------------------
$ 424,455 $ 57,892 $ 216,106 $ 116,621 $ 4,065,982
--------------------------------------------------------------------
--------------------------------------------------------------------

(1) Includes results from May 12, 2006, the date of acquisition of
certain Placer Dome assets.

(2) Includes results from February 15, 2005, the date of acquisition
of Wheaton.


The geographical distribution of the above segments is as follows:

- Red Lake, Porcupine, Musselwhite, Eleonore and Corporate - Canada

- Alumbrera - Argentina

- Luismin - Mexico, Cayman Islands

- Amapari - Brazil

- Peak - Australia

- La Coipa - Chile

- Wharf - United States

- Silver Wheaton - Canada, Cayman Islands

- Pueblo Viejo - Dominican Republic

13. COMMITMENTS

Commitments exist for capital expenditures of approximately $148 million.

14. SUBSEQUENT EVENT

On July 24, 2006, Goldcorp completed the previously announced sale of Mt. Milligan and certain other Canadian exploration interests to Terrane Metals Corp. ("Terrane", formerly Atlas Cromwell Ltd.) for 240 million convertible preferred shares of Terrane at a deemed price of C$0.50 per share. Goldcorp acquired their exploration interests from Barrick in May 2006. The preferred shares are convertible into common shares of Terrane at the option of Goldcorp at any time without any further consideration. On an as-converted basis, Goldcorp would own an approximate 81% equity interest in Terrane's issued and outstanding shares and an approximate 75% on a fully diluted basis. Goldcorp will be required to consolidate Terrane's results of operations from the date of sale.



HEAD OFFICE
Park Place
Suite 3400 - 666 Burrard Street
Vancouver, BC V6C 2X8
Canada
Telephone: (604) 696-3000
Fax: (604) 696-3001
Website: www.goldcorp.com

TORONTO OFFICE
Suite 3201
130 Adelaide Street West
Toronto, ON M5H 3P5
Canada
Telephone: (416) 363-5255
Fax: (416) 359-9787

MEXICO OFFICE
Luismin SA de CV
Arquimedes #130
8th Floor, Polanco
11560 Mexico, DF Mexico
Telephone: 52 (55) 9138-4000
Fax: 52 (55) 5280-7636

BRAZIL OFFICE
Praia do Flamengo 154
4th Floor
Rio de Janeiro RJ 22210-030
Brazil
Telephone: 55 (21) 2122-0500
Fax: 55 (21) 2122-0560

DIRECTORS
David Beatty
Lawrence Bell
John Bell
Beverley Briscoe
Peter Dey
Douglas Holtby, Chairman
Antonio Madero
Donald Quick
Michael Stein
Ian Telfer

EXECUTIVE OFFICERS
Ian Telfer
President & Chief Executive Officer

Russell Barwick
Executive Vice-President & Chief Operating Officer

Lindsay Hall
Executive Vice-President & Chief Financial Officer

Eduardo Luna
Executive Vice-President & President, Luismin SA de CV

Julio Carvalho
Executive Vice-President, Central and South America

Steve Reid
Executive Vice-President, Canada and the United States

STOCK EXCHANGE LISTING
Toronto Stock Exchange: G
New York Stock Exchange: GG

TRANSFER AGENT
CIBC Mellon Trust Company
Suite 1600
1066 West Hastings Street
Vancouver, BC V6E 3X1
Canada
Toll free in Canada and the US: (800) 387-0825
Outside of Canada and the US: (416) 643-5500
Email: inquiries@cibcmellon.com


Contact Information