##### 



Exhibit 99.2
     -s- Ian Telfor
    
    -s- Peter BarnesIan Telfer
    
    Peter BarnesPresident and Chief Executive Officer
    
    Executive Vice President and Chief Financial OfficerVancouver, British ColumbiaMarch 3, 2006-s- Kevin McArthur
    

-s- Lindsay HallKevin McArthur
    
    Lindsay HallPresident and Chief Executive Officer
    
    Executive Vice President and Chief Financial OfficerVancouver, British ColumbiaMarch 9, 2007 as to the effects of
the restatement described in Note 19




---



##### 



Independent Registered Chartered Accountants




---



##### 



(except as to Note 15 which is as of February 14, 2005 and except as to Note 19 which is as of March 9, 2007)




---



##### 



Note
    
    
    2005
    
    
    2004
    
    
    2003Revenues
    
    
    
    
    
    $
    896,408
    
    
    $
    191,016
    
    
    $
    262,642Operating expenses
    
    
    
    
    
    
    304,032
    
    
    
    66,601
    
    
    
    86,963Depreciation and depletion
    
    
    
    
    
    
    135,264
    
    
    
    21,387
    
    
    
    25,225Earnings from mine operations
    
    
    
    
    
    
    457,112
    
    
    
    103,028
    
    
    
    150,454Corporate administration
    
    
    
    
    
    
    29,943
    
    
    
    10,367
    
    
    
    10,303Exploration
    
    
    
    
    
    
    8,035
    
    
    
    6,701
    
    
    
    3,006Earnings from operations
    
    
    
    
    
    
    419,134
    
    
    
    85,960
    
    
    
    137,145Other income (expense)Interest and other income
    
    
    
    
    
    
    9,244
    
    
    
    9,354
    
    
    
    8,905Stock option expense
    
    
    14
    
    
    
    (13,876
    )
    
    
    (5,081
    )
    
    
    (2,275
    )Gain (loss) on foreign exchange
    
    
    
    
    
    
    474
    
    
    
    211
    
    
    
    (1,164
    )Gain (loss) on marketable securities, net
    
    
    
    
    
    
    10,142
    
    
    
    (9,006
    )
    
    
    10,230Dilution gain
    
    
    13
    
    
    
    18,732
    
    
    
    
    
    
    
    Corporate transaction costs
    
    
    6
    
    
    
    (3,592
    )
    
    
    
    
    
    
    21,124
    
    
    
    (4,522
    )
    
    
    15,696Earnings before taxes and non-controlling interests
    
    
    
    
    
    
    440,258
    
    
    
    81,438
    
    
    
    152,841Income and mining taxes
    
    
    7
    
    
    
    142,370
    
    
    
    30,091
    
    
    
    54,037Non-controlling interests
    
    
    13
    
    
    
    12,190
    
    
    
    
    
    
    
    Net earnings
    
    
    
    
    
    $
    285,698
    
    
    $
    51,347
    
    
    $
    98,804Earnings per share
    
    
    14Basic
    
    
    
    
    
    $
    0.91
    
    
    $
    0.27
    
    
    $
    0.54Diluted
    
    
    
    
    
    
    0.83
    
    
    
    0.27
    
    
    
    0.53Weighted-average number of shares outstandingBasic
    
    
    
    
    
    
    314,292
    
    
    
    189,723
    
    
    
    183,574Diluted
    
    
    
    
    
    
    345,394
    
    
    
    193,685
    
    
    
    188,179




---



##### 



Note
    
    
    2005
    
    
    2004AssetsCurrentCash and cash equivalents
    
    
    
    
    
    $
    562,188
    
    
    $
    333,375Gold bullion (market value: $nil; 2004  $96,363)
    
    
    
    
    
    
    
    
    
    
    33,895Marketable securities (market value: $16,086; 2004  $31,006)
    
    
    
    
    
    
    11,264
    
    
    
    22,873Accounts receivable
    
    
    
    
    
    
    75,160
    
    
    
    7,197Income and mining taxes receivable
    
    
    
    
    
    
    2,774
    
    
    
    12,269Future income and mining taxes
    
    
    7
    
    
    
    26,558
    
    
    
    Inventories and stockpiled ore
    
    
    8
    
    
    
    77,182
    
    
    
    15,329Other
    
    
    
    
    
    
    17,225
    
    
    
    1,735772,351
    
    
    
    426,673Mining interests
    
    
    9
    
    
    
    2,980,762
    
    
    
    264,949Goodwill
    
    
    9
    
    
    
    142,654
    
    
    
    Silver contract
    
    
    5
    
    
    
    74,639
    
    
    
    Stockpiled ore
    
    
    8
    
    
    
    51,063
    
    
    
    Long-term investments (market value: $41,056; 2004  $nil)
    
    
    
    
    
    
    33,563
    
    
    
    Other
    
    
    
    
    
    
    10,950
    
    
    
    9,896$
    4,065,982
    
    
    $
    701,518LiabilitiesCurrent
    
    
    
    
    
    $
    97,523
    
    
    $
    25,507Accounts payable and accrued liabilities
    
    
    
    
    
    $
    97,523
    
    
    $
    25,507Income and mining taxes payable
    
    
    
    
    
    
    93,287
    
    
    
    Future income and mining taxes
    
    
    7
    
    
    
    
    
    
    
    1,149190,810
    
    
    
    26,656Future income and mining taxes
    
    
    7
    
    
    
    728,079
    
    
    
    70,610Reclamation and closure cost obligations
    
    
    11
    
    
    
    57,724
    
    
    
    26,403Future employee benefits and other
    
    
    12
    
    
    
    7,005
    
    
    
    983,618
    
    
    
    123,669Non-controlling interests
    
    
    13
    
    
    
    108,601
    
    
    
    Shareholders EquityCapital stock
    
    
    14
    
    
    
    2,653,751
    
    
    
    386,703Cumulative translation adjustment
    
    
    
    
    
    
    101,927
    
    
    
    107,741Retained earnings
    
    
    
    
    
    
    218,085
    
    
    
    83,4052,973,763
    
    
    
    577,849$
    4,065,982
    
    
    $
    701,518
 Commitments and contingencies (note 17)Subsequent events (note 20)Approved by the board:-s- Ian Telfer
    
    -s- Douglas HoltbyIan Telfer
    
    Douglas HoltbyDirector
    
    Director




---



##### 



Note
    
    
    2005
    
    
    2004
    
    
    2003Operating ActivitiesNet earnings
    
    
    
    
    
    $
    285,698
    
    
    $
    51,347
    
    
    $
    98,804Reclamation expenditures
    
    
    11
    
    
    
    (3,598
    )
    
    
    (744
    )
    
    
    (346
    )Items not affecting cashDepreciation and depletion
    
    
    
    
    
    
    135,264
    
    
    
    21,387
    
    
    
    25,225(Gain) loss on marketable securities, net
    
    
    
    
    
    
    (10,142
    )
    
    
    9,006
    
    
    
    (10,230
    )Future income and mining taxes
    
    
    
    
    
    
    7,118
    
    
    
    18,599
    
    
    
    4,123Stock option expense
    
    
    14
    
    
    
    13,876
    
    
    
    5,081
    
    
    
    2,275Non-controlling interests
    
    
    13
    
    
    
    12,190
    
    
    
    
    
    
    
    Dilution gain
    
    
    13
    
    
    
    (18,732
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    (2,942
    )
    
    
    (2,881
    )
    
    
    (2,208
    )Change in non-cash working capital
    
    
    15
    
    
    
    47,024
    
    
    
    (48,692
    )
    
    
    (22,477
    )Cash provided by operating activities
    
    
    
    
    
    
    465,756
    
    
    
    53,103
    
    
    
    95,166Investing ActivitiesMining interests
    
    
    
    
    
    
    (277,510
    )
    
    
    (56,125
    )
    
    
    (74,528
    )Acquisition of Wheaton River Minerals Ltd, net of cash acquired
    
    
    3
    
    
    
    132,446
    
    
    
    
    
    
    
    Acquisition of Bermejal property
    
    
    4
    
    
    
    (70,010
    )
    
    
    
    
    
    
    Purchase of marketable securities
    
    
    
    
    
    
    (8,205
    )
    
    
    (22,594
    )
    
    
    (88,823
    )Proceeds on sale of marketable securities
    
    
    
    
    
    
    36,034
    
    
    
    4,639
    
    
    
    94,134Purchase of long-term investments
    
    
    
    
    
    
    (33,563
    )
    
    
    
    
    
    
    Purchase of gold bullion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,160
    )Proceeds on sale of purchased gold bullion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,112Other
    
    
    
    
    
    
    
    
    
    
    987
    
    
    
    (859
    )Cash used in investing activities
    
    
    
    
    
    
    (220,808
    )
    
    
    (73,093
    )
    
    
    (33,124
    )Financing ActivitiesCommon shares issued, net
    
    
    
    
    
    
    44,014
    
    
    
    3,520
    
    
    
    26,979Dividends paid to common shareholders
    
    
    
    
    
    
    (151,018
    )
    
    
    (53,071
    )
    
    
    (28,375
    )Shares issued by subsidiary to non-controlling interests
    
    
    
    
    
    
    86,737
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    (1,228
    )
    
    
    
    
    
    
    Cash used in financing activities
    
    
    
    
    
    
    (21,495
    )
    
    
    (49,551
    )
    
    
    (1,396
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    5,360
    
    
    
    23,962
    
    
    
    57,475Increase (decrease) in cash and cash equivalents
    
    
    
    
    
    
    228,813
    
    
    
    (45,579
    )
    
    
    118,121Cash and cash equivalents, beginning of year
    
    
    
    
    
    
    333,375
    
    
    
    378,954
    
    
    
    260,833Cash and cash equivalents, end of year
    
    
    
    
    
    $
    562,188
    
    
    $
    333,375
    
    
    $
    378,954Cash and cash equivalents is comprised of:Cash
    
    
    
    
    
    $
    17,717
    
    
    $
    7,490
    
    
    $
    5,628Cash equivalents
    
    
    
    
    
    
    544,471
    
    
    
    325,885
    
    
    
    373,326$
    562,188
    
    
    $
    333,375
    
    
    $
    378,954
 (note 15)




---



##### 



Capital StockShare
    
    
    
    
    
    
    CumulativeCommon Shares
    
    
    Purchase
    
    
    Stock
    
    
    Translation
    
    
    RetainedShares
    
    
    Amount
    
    
    Warrants
    
    
    Options
    
    
    Adjustment
    
    
    Earnings
    
    
    TotalAt January 1, 2003
    
    
    182,390
    
    
    $
    332,738
    
    
    $
    16,110
    
    
    $
    
    
    
    $
    (14,627
    )
    
    $
    14,700
    
    
    $
    348,921Stock options exercised
    
    
    6,884
    
    
    
    26,979
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,979Fair value of stock options
issued and vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,275
    
    
    
    
    
    
    
    
    
    
    
    2,275Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,146
    )
    
    
    (50,146
    )Unrealized gain on translation
of non-US dollar denominated
accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,909
    
    
    
    
    
    
    
    80,909Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,804
    
    
    
    98,804At December 31, 2003
    
    
    189,274
    
    
    
    359,717
    
    
    
    16,110
    
    
    
    2,275
    
    
    
    66,282
    
    
    
    63,358
    
    
    
    507,742Stock options exercised
    
    
    706
    
    
    
    3,529
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    3,520Fair value of stock options
issued and vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,081
    
    
    
    
    
    
    
    
    
    
    
    5,081Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,300
    )
    
    
    (31,300
    )Unrealized gain on translation
of non-US dollar denominated
accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,459
    
    
    
    
    
    
    
    41,459Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,347
    
    
    
    51,347At December 31, 2004
    
    
    189,980
    
    
    
    363,246
    
    
    
    16,110
    
    
    
    7,347
    
    
    
    107,741
    
    
    
    83,405
    
    
    
    577,849Issued pursuant to Wheaton
acquisition (note 3)
    
    
    143,771
    
    
    
    1,887,431
    
    
    
    290,839
    
    
    
    30,794
    
    
    
    
    
    
    
    
    
    
    
    2,209,064Stock options exercised and
restricted share units issued
    
    
    2,556
    
    
    
    32,224
    
    
    
    
    
    
    
    (7,647
    )
    
    
    
    
    
    
    
    
    
    
    24,577Share purchase warrants exercised
    
    
    3,335
    
    
    
    39,824
    
    
    
    (20,121
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,703Fair value of stock options
issued and vested, and
restricted share units vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,938
    
    
    
    
    
    
    
    
    
    
    
    13,938Share issue costs
    
    
    
    
    
    
    (234
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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
    
    
    
    285,698At December 31, 2005
    
    
    339,642
    
    
    $
    2,322,491
    
    
    $
    286,828
    
    
    $
    44,432
    
    
    $
    101,927
    
    
    $
    218,085
    
    
    $
    2,973,763
 (note 14)




---



##### 



1.
    
    DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONSGoldcorp 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 successful acquisition of Wheaton River Minerals Ltd (Wheaton) during the year
(note 3), 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 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/Bermejal gold project in Mexico and the Amapari gold project in northern Brazil. Goldcorp
also owns a 59% interest in Silver Wheaton Corp (Silver Wheaton), a publicly traded silver
mining company.2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThese consolidated financial statements have been prepared by the Company in accordance with
Canadian generally accepted accounting principles (Canadian GAAP) using the following
significant accounting policies. These policies are consistent with accounting principles
generally accepted in the United States in all material respects except as outlined in note 19.
 (a)
    
    Basis of presentation and principles of consolidationThese consolidated financial statements include the accounts of the Company and all of its
subsidiaries and investments. The principal mining properties of Goldcorp are listed below:
 Ownership
    
    
    
    
    Operations andMining properties
    
    Location
    
    interest
    
    
    Status
    
    development projects ownedRed Lake mine (Red Lake)
    
    Canada
    
    
    100%
    
    
    Consolidated
    
    Red Lake mineMinera Alumbrera Ltd (Alumbrera)(1)
    
    Argentina
    
    
    37.5%
    
    
    Proportionately consolidated
    
    Alumbrera mine(note 2 (d))Luismin SA de CV (Luismin)(1)
    
    Mexico
    
    
    100%
    
    
    Consolidated
    
    San Dimas, San Martin and Nukaymines and Los Filos/ Bermejaldevelopment projectPeak Gold Mines Pty Ltd (Peak)(1)
    
    Australia
    
    
    100%
    
    
    Consolidated
    
    Peak mineWharf gold mine (Wharf)
    
    United States
    
    
    100%
    
    
    Consolidated
    
    Wharf mineMineraçao
Pedra Branco do Amapari Ltda
(Amapari) (1)
    
    Brazil
    
    
    100%
    
    
    Consolidated
    
    Amapari development projectSilver Wheaton Corp (Silver Wheaton)(1)
    
    Canada
    
    
    59%
    
    
    Consolidated
    
    Silver contracts in Mexico and Sweden
 
 (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 (note 3). All intercompany transactions and balances have been eliminated.(b)
    
    
    Use of estimatesThe preparation of consolidated financial statements in conformity with Canadian GAAP
requires the Companys management to make estimates and assumptions about future events that
affect the amounts reported in the consolidated financial statements and related notes to the
financial statements. Actual results may differ from those estimates.




---



##### 



Significant estimates used in the preparation of these consolidated financial statements
include, but are not limited to, the recoverability of accounts receivable and investments,
the quantities of material on leach pads and in circuit, the proven and
probable ore reserves and resources and the related depletion and amortization, the estimated
tonnes of waste material to be mined and the estimated recoverable tonnes of ore from each
mine area, the estimated net realizable value of inventories, the accounting for stock-based
compensation, the provision for income and mining taxes and composition of future income and
mining tax assets and liabilities, the expected economic lives of and the estimated future
operating results and net cash flows from mining interests, the anticipated costs of
reclamation and closure cost obligations, and the fair value of assets and liabilities
acquired in business combinations.(c)
    
    Revenue recognitionRevenue from the sale of metals is recognized in the accounts when persuasive evidence of an
arrangement exists, title and risk passes to the buyer, collection is reasonably assured and
the price is reasonably determinable. Revenue from the sale of metals in concentrate may be
subject to adjustment upon final settlement of estimated metal prices, weights and assays.
Adjustments to revenue for metal prices are recorded monthly and other adjustments are
recorded on final settlement. Refining and treatment charges are netted against revenue for
sales of metal concentrate.(d)
    
    Investment in AlumbreraThe 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.(e)
    
    Cash and cash equivalentsCash and cash equivalents include cash, and those short-term money market instruments that
are readily convertible to cash with an original term of less than 90 days.(f)
    
    Marketable securitiesMarketable securities are carried at the lower of cost or market value.(g)
    
    Inventories and stockpiled oreWork-in-process inventories, stockpiled ore and finished goods are valued at the lower of
average production cost or net realizable value. Production costs include the cost of raw
materials, direct labour, mine-site overhead expenses and depreciation and depletion of
mining interests. Supplies are valued at the lower of average cost or replacement cost.(h)
    
    Mining interestsMining interests represent capitalized expenditures related to the exploration and
development of mining properties and related plant and equipment. Capitalized costs are
depreciated and depleted using either a unit-of-production 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
value allocated to reserves is depreciated on a unit-of-production method over the estimated
recoverable proven and probable reserves at the mine. The reserve value is noted as
depletable mining properties in Note 9. The resource value represents the property interests
that are believed to potentially contain economic mineralized material such as inferred
material within pits; measured, indicated, and inferred resources with insufficient drill
spacing to qualify as proven and probable reserves; and inferred resources in close proximity
to proven and probable reserves. Exploration




---



##### 



potential represents the estimated mineralized
material contained within (i) areas adjacent to existing reserves and mineralization located
within the immediate mine area; (ii) areas outside of immediate mine areas that are not part
of measured, indicated, or inferred resources; and (iii) greenfields exploration potential that
is not associated with any other production, development, or exploration stage property, as
described above. Resource value and exploration potential value is noted as non-depletable
mining properties in Note 9. At least annually or when otherwise appropriate, value from the
non-depletable category is transferred to the depletable category as a result of an analysis
of the conversion of resources or exploration potential into reserves.Costs related to property acquisitions are capitalized until the viability of the mineral
property is determined. When it is determined that a property is not economically viable the
capitalized costs are written-off.Exploration costs incurred to the date of establishing that a property is economically
recoverable are charged to operations. Further development expenditures are capitalized to
the property.Mining expenditures incurred either to develop new ore bodies or to develop mine areas in
advance of current production are capitalized. Commercial production is deemed to have
commenced when management determines that the completion of operational commissioning of
major mine and plant components is completed, operating results are being achieved
consistently for a period of time and that there are indicators that these operating results
will be continued. Mine development costs incurred to maintain current production are
included in operations.Upon sale or abandonment the cost of the property and equipment, and related accumulated
depreciation or depletion, are removed from the accounts and any gains or losses thereon are
included in operations.The Company reviews and evaluates its mining properties for impairment at least annually or
when events or changes in circumstances indicate that the related carrying amounts may not be
recoverable. 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.(i)
    
    GoodwillAcquisitions are accounted for using the purchase method whereby assets and liabilities
acquired are recorded at their fair values as of the date of acquisition and any excess of
the purchase price over such fair value is recorded as goodwill. Goodwill is 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.
Goodwill is not amortized.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.(j)
    
    Silver contractContracts for which settlement is called for in silver are recorded at cost. The cost of
this asset is separately allocated to reserves, resources and exploration potential. The
value allocated to reserves is depreciated on a unit-of-sale basis over the estimated
recoverable reserves at the mine corresponding to the specific contract.Evaluations of the carrying values of each contract are undertaken at least annually to
determine if estimated undiscounted future net cash flows are less than the carrying value.
Estimated undiscounted future net cash flows are calculated using




---



##### 



estimated production, sales
prices and purchase costs. If it is determined that the undiscounted future net cash flows
from an operation are less than the carrying value then a write-down to fair value is
recorded with a charge to operations.(k)
    
    Long-term investmentsLong-term investments are carried at cost. When a decline in market value that is other than
temporary has occurred, these investments are written down to provide for the loss.(l)
    
    Income and mining taxesThe Company uses the liability method of accounting for income and mining taxes. Under the
liability method, future tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and for tax losses and other
deductions carried forward. Upon business acquisitions, the liability method results in a
gross up of mining interests to reflect the recognition of the future tax liabilities for the
tax effect of such differences.Future tax assets and liabilities are measured using enacted or substantively enacted tax
rates expected to apply when the asset is realized or the liability settled. A reduction in
respect of the benefit of a future tax asset (a valuation allowance) is recorded against any
future tax asset if it is not likely to be realized. The effect on future tax assets and
liabilities of a change in tax rates is recognized in income in the period in which the
change is substantively enacted.(m)
    
    Reclamation and closure cost obligationsThe Companys mining and exploration activities are subject to various governmental laws and
regulations relating to the protection of the environment. These environmental regulations
are continually changing and are generally becoming more restrictive. The Company has made,
and intends to make in the future, expenditures to comply with such laws and regulations.
The Company has recorded a liability and corresponding asset for the estimated future cost of
reclamation and closure, including site rehabilitation and long-term treatment and monitoring
costs, discounted to net present value. Such estimates are, however, subject to change based
on negotiations with regulatory authorities, or changes in laws and regulations. A change in
estimated discount rates is reviewed annually or as new information becomes available.(n)
    
    Non-controlling interestsNon-controlling interests exist on less than wholly-owned subsidiaries of the Company and
represent the outside interests share of the carrying values of the subsidiaries. When the
subsidiary company issues its own shares to outside interests, a dilution gain or loss arises
as a result of the difference between the Companys share of the proceeds and the carrying
value of the underlying equity.(o)
    
    Foreign currency translationPrior to April 1, 2005, the Canadian dollar was determined to be the measurement currency of
the Companys Canadian operations and these operations have been translated into United
States dollars up until this date using the current rate method as follows: all assets and
liabilities are translated into United States dollars at the exchange rate prevailing at the
balance sheet date; all revenue and expense items are translated at the average rate of
exchange for the period; and the resulting translation adjustment is recorded as a cumulative
translation adjustment (CTA), a separate component of shareholders equity. Subsequent to
the change in measurement currency described below, the CTA balance will remain the same
until reporting units which gave rise to the CTA balance is disposed of or retired. In
addition, unrealized gains and losses due to movements in exchange rates on cash balances
held in foreign currencies are shown separately on the Consolidated Statements of Cash Flows.Due to the Wheaton acquisition and related changes, including holding a greater proportion of
the Companys cash in United States dollars, it has been determined that as of April 1, 2005,
the United States dollar is the reporting and measurement




---



##### 



currency of the Companys Canadian
operations and therefore these operations have been translated using the temporal method from
that date onward. All operations outside of Canada, including those of Wheaton, previously
applied the United
States dollar as their reporting and measurement currency and therefore translated their
operating results using the temporal method. Under this method, foreign currency monetary
assets and liabilities are translated into United States dollars at the exchange rates
prevailing at the balance sheet date; non-monetary assets denominated in foreign currencies
are translated using the rate of exchange at the transaction date; and foreign exchange gains
and losses are included in the determination of earnings.(p)
    
    Earnings per shareEarnings per share calculations are based on the weighted average number of common shares and
common share equivalents issued and outstanding during the year. Diluted earnings per share
are calculated using the treasury method which requires the calculation of diluted earnings
per share by assuming that outstanding stock options, warrants, and restricted share units
with an average market price that exceeds the average exercise prices of the options and
warrants for the year, are exercised and the assumed proceeds are used to repurchase shares
of the Company at the average market price of the common shares for the year.(q)
    
    Stock-based compensationThe Company applies the fair value method of accounting for all stock option awards. Under
this method the Company recognizes a compensation expense for all stock options awarded to
employees since January 1, 2003, based on the fair value of the options on the date of grant
which is determined by using an option pricing model. The fair value of the options is
expensed over the vesting period of the options. Stock options issued to employees before
January 1, 2003 were accounted for using the settlement method and accordingly, no
compensation expense has been recorded for those options.(r)
    
    Financial instrumentsThe Companys financial instruments comprise, primarily, cash and cash equivalents, accounts
receivable, marketable securities and accounts payable. The fair value of the financial
instruments approximates their carrying values due primarily to their immediate or short-term
maturity.The Company employs, from time to time, interest rate and Canadian dollar forward and option
contracts to manage exposure to fluctuations in interest rates and foreign currency exchange
rates.(s)
    
    Comparative amountsCertain comparative information has been reclassified to conform to the current years
presentation.
 3.
    
    BUSINESS COMBINATIONOn December 6, 2004, Goldcorp and Wheaton announced a proposed transaction which provided
for Goldcorp to make a take-over bid for Wheaton on the basis of one Goldcorp share for every
four Wheaton shares. On December 29, 2004, Goldcorp mailed the Goldcorp Take-over Bid Circular
to the Wheaton shareholders.On February 8, 2005, Goldcorp announced a special $0.50 per share cash dividend would be payable
to existing Goldcorp shareholders should shareholders approve by majority Goldcorps take-over
bid for Wheaton and Wheaton shareholders tender the minimum two-thirds bid requirement. The
payment of the special dividend also resulted in an adjustment to the exchange ratio of
Goldcorps outstanding warrants  an increase in entitlement from 2.0 to 2.08 Goldcorp shares
per warrant.On February 10, 2005, at a special meeting, Goldcorp shareholders approved the issuance of
additional Goldcorp common shares to effect the acquisition of Wheaton. As of February 14,
2005, the effective date of acquisition, approximately 70% of the outstanding Wheaton common
shares were tendered to Goldcorps offer, satisfying the minimum two-thirds bid requirement
under




---



##### 



the terms of the Goldcorp offer. With conditions met, the special $0.50 per share cash
dividend, totaling approximately $95 million, was paid on February 28, 2005.As of March 31, 2005, Goldcorp held approximately 82% of the outstanding Wheaton common shares
and by April 15, 2005, 100% had been acquired. In addition, each Wheaton warrant or stock
option, which gave the holder the right to acquire common shares of Wheaton, was exchanged for a
warrant or stock option of Goldcorp, giving the holder the right to acquire common shares of
Goldcorp on the same basis as the exchange of Wheaton common shares for Goldcorp common shares.This business combination has been accounted for as a purchase transaction, with Goldcorp being
identified as the acquirer and Wheaton as the acquiree in accordance with CICA Handbook Section
1581 Business Combinations. These consolidated financial statements include 82% of Wheatons
operating results for the period February 15 to April 15, 2005, and 100% of the results
thereafter. The allocation of the purchase price of the shares of Wheaton is summarized in the
following table:
 Purchase priceCommon shares of Goldcorp issued to acquire 100% of Wheaton (143.8 million shares)
    
    $
    1,887,431Share purchase warrants of Goldcorp issued in exchange for those of Wheaton (174.8 million warrants)
    
    
    290,839Stock options of Goldcorp issued in exchange for those of Wheaton (4.9 million options)
    
    
    30,794Acquisition costs
    
    
    25,959$
    2,235,023Net assets acquired:Cash and cash equivalents
    
    $
    168,663Marketable securities
    
    
    4,348Other non-cash operating working capital
    
    
    810Mining interests
    
    
    2,502,116Silver contract
    
    
    77,489Stockpiled ore, non-current
    
    
    55,286Other long-term assets
    
    
    3,767Future income taxes, net
    
    
    (631,789
    )Reclamation and closure cost obligations
    
    
    (24,457
    )Future employee benefits
    
    
    (5,296
    )Other liabilities
    
    
    (10,258
    )Non-controlling interest in Silver Wheaton (35%) (note 13)
    
    
    (54,908
    )Net identifiable assets
    
    
    2,085,771Residual purchase price allocated to goodwill (note 9)
    
    
    149,252$
    2,235,023




---



##### 



pronouncements relating to Mining Assets and Business Combinations
(CICA Emerging Issues Committee Abstract 152). The amount allocated to goodwill is not
deductible for tax purposes.An independent valuation of the significant assets acquired was completed in February, 2006,
supporting managements allocation of the purchase consideration.4.
    
    ACQUISITIONOn March 31, 2005, Goldcorp completed the acquisition of the Bermejal gold deposit in Mexico
for cash consideration of $70 million from a joint venture of Industrias Peñoles SA de CV and
Newmont Mining Corporation. The Bermejal gold deposit is located two kilometres south of
Goldcorps Los Filos gold deposit. The Company plans to develop the two deposits as a single
project, the Los Filos/Bermejal project, and a detailed engineering study for the combined
project is scheduled to be completed in March, 2006.5.
    
    SILVER CONTRACTSilver 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 December 31, 2005 is $74,639,000 which is being amortized to operations on a unit-of-sale
basis.6.
    
    CORPORATE TRANSACTION COSTSCertain costs associated with the restructuring of Goldcorps Toronto office, following the
acquisition of Wheaton, including severance and restructuring of insurance policies, may not be
capitalized as acquisition costs under current accounting standards. These costs have been
expensed in the amount of $3,592,000 for the year ended December 31, 2005.




---



##### 



7.
    
    INCOME AND MINING TAXES
 2005
    
    
    2004
    
    
    2003Current income and mining tax expense
    
    $
    135,252
    
    
    $
    11,492
    
    
    $
    49,914Future income and mining tax expense
    
    
    7,118
    
    
    
    18,599
    
    
    
    4,123$
    142,370
    
    
    $
    30,091
    
    
    $
    54,037
  2005
    
    
    2004
    
    
    2003Earnings before income taxes
    
    $
    440,258
    
    
    $
    81,438
    
    
    $
    152,841Canadian federal and provincial income tax rates
    
    
    38.5
    %
    
    
    40.0
    %
    
    
    40.0
    %Income tax expense based on above rates
    
    
    169,450
    
    
    
    32,575
    
    
    
    61,136Increase (decrease) due to:Provincial mining taxes
    
    
    20,695
    
    
    
    7,460
    
    
    
    11,855Non-deductible expenditures
    
    
    6,197
    
    
    
    2,016
    
    
    
    904Resource allowance
    
    
    (17,480
    )
    
    
    (9,009
    )
    
    
    (13,784
    )Lower statutory tax rates on earnings of foreign subsidiaries
    
    
    (15,627
    )
    
    
    (191
    )
    
    
    (28
    )Dilution gain not subject to tax
    
    
    (7,210
    )
    
    
    
    
    
    
    Foreign exchange and other permanent differences
    
    
    (6,543
    )
    
    
    
    
    
    
    Mining duties deduction
    
    
    (2,343
    )
    
    
    (1,468
    )
    
    
    (3,266
    )Non-taxable portion of realized capital (gains) losses
    
    
    (2,618
    )
    
    
    1,787
    
    
    
    (2,325
    )Canadian exploration expenses recognized
    
    
    (1,715
    )
    
    
    
    
    
    
    Realization of future tax asset not previously recognized
    
    
    (1,357
    )
    
    
    (920
    )
    
    
    Other
    
    
    921
    
    
    
    (2,159
    )
    
    
    (455
    )$
    142,370
    
    
    $
    30,091
    
    
    $
    54,037The components of future income taxes are as follows:2005
    
    
    2004Future income and mining tax assetsNon-capital losses
    
    $
    13,216
    
    
    $
    111Deductible temporary differences and other
    
    
    49,818
    
    
    
    22,202Value of future income tax and mining assets
    
    
    63,034
    
    
    
    22,313Recoverable asset taxes
    
    
    1,491
    
    
    
    Valuation allowance
    
    
    (14,557
    )
    
    
    (12,032
    )49,968
    
    
    
    10,281Future income and mining tax liabilitiesTotal taxable temporary differences
    
    
    (751,489
    )
    
    
    (82,040
    )Future income and mining tax liabilities, net
    
    $
    (701,521
    )
    
    $
    (71,759
    )Presented on the Consolidated Balance Sheets as:Future income and mining tax assets
    
    $
    26,558
    
    
    $
    Future income and mining tax liabilities
    
    
    (728,079
    )
    
    
    (71,759
    )Future income and mining tax liabilities, net
    
    $
    (701,521
    )
    
    $
    (71,759
    )




---



##### 



Tax Loss Carry ForwardsAt December 31, 2005, the Company had non-capital losses available for tax purposes in foreign
jurisdictions of $37,527,000 net of valuation allowance that expire from 2006 to 2015.8.
    
    INVENTORIES AND STOCKPILED ORE
 2005
    
    
    2004Supplies
    
    $
    25,071
    
    
    $
    4,146Finished goods
    
    
    16,699
    
    
    
    644Work in process
    
    
    29,122
    
    
    
    10,539Stockpiled ore
    
    
    57,353
    
    
    
    128,245
    
    
    
    15,329Less: non-current stockpiled ore
    
    
    51,063
    
    
    
    $
    77,182
    
    
    $
    15,329
 Non-current stockpiled ore is comprised of lower grade ore at Alumbrera, which will be processed
later in the mine life.9.
    
    MINING INTERESTS
 2005
    
    
    2004Accumulated
    
    
    
    
    
    
    
    
    
    
    Accumulateddepreciation and
    
    
    
    
    
    
    
    
    
    
    depreciationCost
    
    
    depletion
    
    
    Net
    
    
    Cost
    
    
    and depletion
    
    
    NetMining properties
    
    $
    2,532,984
    
    
    $
    205,223
    
    
    $
    2,327,761
    
    
    $
    287,715
    
    
    $
    134,429
    
    
    $
    153,286Plant and equipment
    
    
    794,895
    
    
    
    141,894
    
    
    
    653,001
    
    
    
    223,662
    
    
    
    111,999
    
    
    
    111,663$
    3,327,879
    
    
    $
    347,117
    
    
    $
    2,980,762
    
    
    $
    511,377
    
    
    $
    246,428
    
    
    $
    264,949
  Mining propertiesPlant and
    
    
    Total
    
    
    TotalDepletable
    
    
    Non-depletable
    
    
    Total
    
    
    equipment
    
    
    2005
    
    
    2004Red Lake mine, Canada
    
    $
    184,218
    
    
    $
    
    
    
    $
    184,218
    
    
    $
    105,274
    
    
    $
    289,492
    
    
    $
    252,149Alumbrera mine, Argentina
    
    
    420,425
    
    
    
    35,456
    
    
    
    455,881
    
    
    
    268,782
    
    
    
    724,663
    
    
    
    Luismin mines, Mexico (i)
    
    
    148,436
    
    
    
    613,886
    
    
    
    762,322
    
    
    
    80,348
    
    
    
    842,670
    
    
    
    Peak mine, Australia
    
    
    33,358
    
    
    
    109,609
    
    
    
    142,967
    
    
    
    26,058
    
    
    
    169,025
    
    
    
    Amapari project, Brazil
    
    
    
    
    
    
    183,714
    
    
    
    183,714
    
    
    
    85,018
    
    
    
    268,732
    
    
    
    Los Filos/Bermejal project, Mexico
    
    
    
    
    
    
    337,386
    
    
    
    337,386
    
    
    
    84,434
    
    
    
    421,820
    
    
    
    El Limón and other projects, Mexico
    
    
    
    
    
    
    254,217
    
    
    
    254,217
    
    
    
    1,995
    
    
    
    256,212
    
    
    
    Wharf mine, United States
    
    
    6,098
    
    
    
    
    
    
    
    6,098
    
    
    
    87
    
    
    
    6,185
    
    
    
    7,897Corporate and other
    
    
    958
    
    
    
    
    
    
    
    958
    
    
    
    1,005
    
    
    
    1,963
    
    
    
    4,903$
    793,493
    
    
    $
    1,534,268
    
    
    $
    2,327,761
    
    
    $
    653,001
    
    
    $
    2,980,762
    
    
    $
    264,949
 (i)
    
    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 propertiesPlant and
    
    
    Total
    
    
    TotalDepletable
    
    
    Non-depletable
    
    
    Total
    
    
    equipment
    
    
    2005
    
    
    2004Silver interests
    
    $
    32,872
    
    
    $
    167,149
    
    
    $
    200,021
    
    
    $
    
    
    
    $
    200,021
    
    
    $
    




---



##### 



December 31
    
    
    
    
    
    
    Dilution of
    
    
    December 312004
    
    
    Additions
    
    
    ownership
    
    
    2005Luismin
    
    $
    
    
    
    $
    74,252
    
    
    $
    
    
    
    $
    74,252Silver Wheaton
    
    
    
    
    
    
    75,000
    
    
    
    (6,598
    )
    
    
    68,402$
    
    
    
    $
    149,252
    
    
    $
    (6,598
    )
    
    $
    142,654
 10.
    
    BANK CREDIT FACILITIES
 (a)
    
    The Company has an Aus$5,000,000 ($3,668,000), unsecured, revolving working capital
facility for its Peak mine operations of which $nil was drawn down at December 31, 2005.
The loan bears interest related to the Australian Treasury Bill rate plus 1.5% per annum.(b)
    
    During 2005, the Company cancelled a $300 million acquisition facility and a $75
million revolving working capital facility, both of which were undrawn.(c)
    
    On July 29, 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. The facility is undrawn as at December 31, 2005.
 11.
    
    RECLAMATION AND CLOSURE COST OBLIGATIONSThe Companys asset retirement obligations consist of reclamation and closure costs for both
active and inactive mines. The present value of obligations relating to active mines is
currently estimated at $49,890,000 (2004  $21,204,000) reflecting payments for approximately
the next 55 years. The present value of obligations relating to inactive mines is currently
estimated at $7,834,000 (2004  $5,199,000) reflecting payments for approximately the next 10
years. Significant reclamation and closure activities include land rehabilitation, demolition
of buildings and mine facilities, ongoing care and maintenance and other costs.The liability for reclamation and closure cost obligations at December 31, 2005 is $57,724,000
(2004  $26,403,000). The undiscounted value of this liability is $78,227,000 (2004 
$39,399,000). An inflation rate assumption of 2% has been used. An accretion expense component
of $8,149,000 (2004  $1,329,000) has been charged to operations in 2005 to reflect an increase
in the carrying amount of the asset retirement obligation which has been determined using a
discount rate of 5%. Changes to the reclamation and closure cost balance during the year are as
follows:
 2005
    
    
    2004Reclamation and closure cost obligations  January 1
    
    $
    26,403
    
    
    $
    21,850Arising on acquisition of Wheaton (note 3)
    
    
    24,457
    
    
    
    Reclamation expenditures
    
    
    (3,598
    )
    
    
    (744
    )Accretion expense
    
    
    8,149
    
    
    
    1,329Revisions in estimates and liabilities incurred
    
    
    2,313
    
    
    
    3,968Reclamation and closure cost obligations  December 31
    
    $
    57,724
    
    
    $
    26,403




---



##### 



12.
    
    FUTURE EMPLOYEE BENEFITS AND OTHERFuture employee benefits and other consist of a defined benefit pension plan for certain
Mexican employees and certain future employee benefits for Australian and Mexican employees.13.
    
    NON-CONTROLLING INTERESTSOn February 14, 2005, Goldcorp acquired an 82% interest in Wheaton (note 3)which resulted
in the recording of an 18% non-controlling interest of $141,850,000. During the period February
15 to April 15, 2005, the non-controlling interests share of Wheatons net earnings was
$3,548,000. During the same period, Wheaton issued common shares to non-controlling interests
from the exercise of stock options and warrants in the amount of $3,255,000. Goldcorp acquired
the remaining 18% non-controlling interests share of Wheaton on April 15, 2005.A further non-controlling interest arose as a result of the Wheaton acquisition with respect to
Wheatons 65% ownership of its subsidiary, Silver Wheaton. This interest decreased to 59%
during the year following the issuance of additional shares by Silver Wheaton to non-controlling
interests. This dilution of the Companys interest gave rise to a gain of $18,732,000 which has
been recognized in operations for the current year.The detail of this non-controlling interest in Silver Wheaton is as follows:
 At January 1, 2005
    
    
    
    
    
    $
    Arising upon acquisition of Wheaton
    
    
    
    
    
    
    54,908Shares issued to non-controlling interests, net
    
    $
    83,482Less: increase in net assets attributable to Goldcorp
    
    
    (48,307
    )Add: Book value of dilution of Goldcorps share of net assets
    
    
    9,876
    
    
    
    45,05199,959Share of net earnings of Silver Wheaton
    
    
    
    
    
    
    8,642At December 31, 2005
    
    
    
    
    
    $
    108,601
 Subsequent to December 31, 2005, the Companys ownership interest in Silver Wheaton will
increase to 62% following the issuance to the Company of 18 million common shares and a $20
million promissory note (note 20).Total non-controlling interest for the year on the statement of earnings is comprised of
$8,642,000 related to Silver Wheaton and $3,548,000 related to Wheaton for the period February
15 to April 15, 2005.14.
    
    SHAREHOLDERS EQUITY
 2005
    
    
    2004Common shares
    
    $
    2,322,491
    
    
    $
    363,246Share purchase warrants (a)
    
    
    286,828
    
    
    
    16,110Stock options (b)
    
    
    44,432
    
    
    
    7,347$
    2,653,751
    
    
    $
    386,703
  (a)
    
    Share Purchase WarrantsThe payment of a special dividend (note 3)during February 2005 resulted in an adjustment to
the exchange ratio of Goldcorps warrants outstanding prior to the acquisition of Wheaton 
an increase in entitlement from 2.0 to 2.08 Goldcorp shares per warrant. Upon completion of
the Wheaton transaction on April 15, 2005, Goldcorp issued 174.8 million Series A, B and C




---



##### 



share purchase warrants to the former Wheaton share purchase warrant holders. Each share
purchase warrant is exercisable for 0.25 Goldcorp common shares at prices ranging from C$1.65
to C$3.10 (or C$6.60 to C$12.40 for four share purchase warrants which are exchangeable for
one Goldcorp common share), with expiry dates ranging from 2007 to 2008.The following table summarizes information about the share purchase warrants outstanding at
December 31, 2005:
 Commonshares to beWarrants
    
    
    
    
    
    
    
    
    
    
    receivedoutstanding
    
    
    
    
    
    
    Exchange
    
    
    upon exercise
    
    
    Effective price(in thousands of warrants and shares)
    
    and exercisable
    
    
    Exercise price
    
    
    ratio
    
    
    of warrants
    
    
    per share
    
    
    Expiry dateUS dollar Warrants
    
    
    3,991
    
    
    $
    25.00
    
    
    
    2.08
    
    
    
    8,302
    
    
    $
    12.02
    
    
    April 30, 2007Canadian dollar Warrants
Series A and C
    
    
    97,371
    
    
    C$
    1.65
    
    
    
    0.25
    
    
    
    24,343
    
    
    C$
    6.60
    
    
    May 30, 2007Series B
    
    
    64,133
    
    
    
    3.10
    
    
    
    0.25
    
    
    
    16,033
    
    
    
    12.40
    
    
    August 25, 2008Share purchase warrants
    
    
    3,000
    
    
    
    20.00
    
    
    
    2.08
    
    
    
    6,240
    
    
    
    9.62
    
    
    May 13, 200946,616
    
    
    C$
    9.00
 (b)
    
    Stock OptionsOn May 15, 2005, shareholders approved the Companys 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.The Company recognizes a compensation expense for all stock options awarded since January 1,
2003, based on the fair value of the options on the date of grant which is determined by
using an option pricing model with the following assumptions: risk-free interest rate of 3%
(2004  4%); dividend yield of 1% (2004  1%); volatility factor of the expected market price
of the Companys common stock of 30% (2004  42%); and a weighted average expected life of
the options of fours years (2004  five years). The fair value of the options is expensed
over the vesting period of the options. No compensation expense had been recorded for stock
options issued before January 1, 2003. As a result of the acquisition of Wheaton, all
Goldcorp stock options which existed at December 31, 2004 became fully vested during the
first quarter of 2005 and were expensed in the amount of $5,320,000. On April 15, 2005, as a
result of the Wheaton acquisition, Wheaton stock options with a fair value of $30,794,000
were converted to 4.9 million Goldcorp stock options, all of which are fully vested and are
exercisable at prices ranging from C$2.28 to C$15.68, with expiry dates ranging from 2006 to
2010.In addition, during the year, the Company granted 5,095,000 stock options which vest over a
period of three years, are exercisable at prices ranging from C$19.23 to C$23.39 per option,
expire in 2015, and have a total fair value of $20,338,000. Compensation expense of
$7,905,000 has been recognized during the year and the remainder will be recognized as the
stock options vest.




---



##### 



A summary of changes in outstanding stock options is as follows:
 WeightedAverage(in thousands, except per option amounts)
    
    Outstanding
    
    
    Exercise PriceAt January 1, 2003
    
    
    10,890
    
    
    
    C$6.92Granted
    
    
    2,176
    
    
    
    17.62Exercised
    
    
    (6,884
    )
    
    
    (5.21
    )Cancelled
    
    
    (170
    )
    
    
    (9.64
    )At January 1, 2004
    
    
    6,012
    
    
    
    12.68Granted
    
    
    1,335
    
    
    
    16.89Exercised
    
    
    (706
    )
    
    
    (6.64
    )Cancelled
    
    
    (497
    )
    
    
    (16.47
    )At December 31, 2004
    
    
    6,144
    
    
    
    13.98Issued in connection with acquisition of Wheaton
    
    
    4,917
    
    
    
    9.52Granted
    
    
    5,095
    
    
    
    19.31Exercised
    
    
    (2,545
    )
    
    
    (10.11
    )Cancelled
    
    
    (34
    )
    
    
    (17.66
    )At December 31, 2005
    
    
    13,577
    
    
    
    C$15.08
 The following table summarizes information about the options outstanding at December 31,
2005:
 Options Outstanding
    
    Options ExercisableWeighted
    
    Options
    
    
    
    
    
    WeightedAverage
    
    Outstanding
    
    
    
    
    
    AverageOptions
    
    Weighted
    
    Remaining
    
    and
    
    Weighted
    
    RemainingOutstanding
    
    Average
    
    Contractual
    
    Exercisable
    
    Average
    
    ContractualExercise Prices (C$)
    
    (000s)
    
    Exercise Price
    
    Life (years)
    
    (000s)
    
    Exercise Price
    
    Life (years)$2.05  $3.90
    
    
    468
    
    
    
    C$3.00
    
    
    
    2.7
    
    
    
    468
    
    
    
    C$3.00
    
    
    
    2.7$4.40  $7.68
    
    
    1,395
    
    
    
    6.10
    
    
    
    2.2
    
    
    
    1,395
    
    
    
    6.10
    
    
    
    2.2$11.40  $13.00
    
    
    3,725
    
    
    
    12.55
    
    
    
    4.7
    
    
    
    3,725
    
    
    
    12.55
    
    
    
    4.7$14.80  $16.87
    
    
    1,278
    
    
    
    16.52
    
    
    
    7.7
    
    
    
    1,278
    
    
    
    16.52
    
    
    
    7.7$17.50  $19.46
    
    
    6,603
    
    
    
    18.84
    
    
    
    9.0
    
    
    
    2,146
    
    
    
    18.02
    
    
    
    8.1$23.39  $23.80
    
    
    108
    
    
    
    23.44
    
    
    
    9.6
    
    
    
    13
    
    
    
    23.80
    
    
    
    7.913,577
    
    
    
    C$15.08
    
    
    
    6.8
    
    
    
    9,025
    
    
    
    C$12.97
    
    
    
    5.6
 (c)
    
    Restricted Share UnitsOn May 15, 2005, shareholders approved the Companys Restricted Share Unit Plan which allows
for up to 500,000 restricted share units to be granted to employees, directors and
consultants.On June 29, 2005, the Company granted 31,500 restricted share units to the non-executive
Directors of the Company, which vest over a period of two years from the grant date. The
Company will record compensation expense totalling $495,000 over the two year vesting period.
Compensation expense of $227,000 has been recognized in 2005 and the remainder will be
recognized as the restricted share units vest.




---



##### 



(d)
    
    Diluted Earnings per ShareThe following table sets forth the computation of diluted earnings per share:
 2005
    
    
    2004
    
    
    2003Earnings available to common shareholders
    
    $
    285,698
    
    
    $
    51,347
    
    
    $
    98,804Basic weighted-average number of shares outstanding
    
    
    314,292
    
    
    
    189,723
    
    
    
    183,574Effect of dilutive securities:Stock options
    
    
    3,249
    
    
    
    1,153
    
    
    
    1,747Warrants
    
    
    27,832
    
    
    
    2,809
    
    
    
    2,858Restricted share units
    
    
    21
    
    
    
    
    
    
    
    Diluted weighted-average number of shares outstanding
    
    
    345,394
    
    
    
    193,685
    
    
    
    188,179Earnings per shareBasic
    
    $
    0.91
    
    
    $
    0.27
    
    
    $
    0.54Diluted
    
    
    0.83
    
    
    
    0.27
    
    
    
    0.53
 The following lists the stock options 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 year:
 2005
    
    
    2004
    
    
    2003Stock options
    
    
    108
    
    
    
    1,804
    
    
    
    34
 (e)
    
    Pro forma net earningsThe following is the Companys pro forma net earnings assuming the fair value method of
accounting for stock options had been applied to all options issued since January 1, 2002:
 2005
    
    
    2004
    
    
    2003Net earnings
    
    $
    285,698
    
    
    $
    51,347
    
    
    $
    98,804Net additional compensation
expense related to fair value of
stock options
    
    
    (320
    )
    
    
    (1,433
    )
    
    
    (3,923
    )Pro forma net earnings
    
    $
    285,378
    
    
    $
    49,914
    
    
    $
    94,881Pro forma net earnings per shareBasic
    
    $
    0.91
    
    
    $
    0.26
    
    
    $
    0.52Diluted
    
    
    0.83
    
    
    
    0.26
    
    
    
    0.50




---



##### 



15.
    
    SUPPLEMENTAL CASH FLOW INFORMATION
 2005
    
    
    2004
    
    
    2003Change in non-cash operating working capitalGold bullion
    
    $
    33,895
    
    
    $
    (27,986
    )
    
    $
    8,122Accounts receivable
    
    
    (23,676
    )
    
    
    2,377
    
    
    
    (4,882
    )Income and mining taxes receivable
    
    
    12,269
    
    
    
    
    
    
    
    Inventories and stockpiled ore
    
    
    (10,046
    )
    
    
    9,710
    
    
    
    (3,825
    )Accounts payable and accrued liabilities
    
    
    6,216
    
    
    
    (4,990
    )
    
    
    4,120Income and mining taxes payable
    
    
    37,621
    
    
    
    (27,790
    )
    
    
    (25,959
    )Other
    
    
    (9,255
    )
    
    
    (13
    )
    
    
    (53
    )$
    47,024
    
    
    $
    (48,692
    )
    
    $
    (22,477
    )Non-cash financing and investing activitiesShares issued on acquisition of Wheaton
    
    $
    1,887,431
    
    
    $
    
    
    
    $
    Warrants issued in exchange for those of Wheaton
    
    
    290,839
    
    
    
    
    
    
    
    Stock options issued in exchange for those of Wheaton
    
    
    30,794
    
    
    
    
    
    
    
    Operating activities included the following cash paymentsIncome taxes paid
    
    $
    89,872
    
    
    $
    39,584
    
    
    $
    75,875Interest paid
    
    
    
    
    
    
    
    
    
    
    
 16.
    
    SEGMENTED INFORMATIONThe Companys reportable operating segments are summarized in the table below.
 2005Silver
    
    
    Corporate, otherRed Lake
    
    
    Alumbrera
    
    
    Luismin
    
    
    Amapari
    
    
    Peak
    
    
    Wharf
    
    
    Wheaton
    
    
    and eliminations
    
    
    Total(note 1)
    
    
    (note 1)
    
    
    (note 1)
    
    
    (note 1)
    
    
    
    
    
    
    (note 1)
    
    
    (note 1)Revenues
    
    $
    362,026
    
    
    $
    299,225
    
    
    $
    90,696
    
    
    $
    
    
    
    $
    58,790
    
    
    $
    37,0
    
    
    
    57           $65,700
    
    
    $
    (17,086
    )
    
    $
    896,408Depreciation and depletion
    
    
    36,723
    
    
    
    59,018
    
    
    
    16,170
    
    
    
    
    
    
    
    8,572
    
    
    
    7,583
    
    
    
    9,488
    
    
    
    (2,290
    )
    
    
    135,264Earnings (loss) from
operations
    
    
    242,906
    
    
    
    134,459
    
    
    
    19,743
    
    
    
    
    
    
    
    16,990
    
    
    
    3,893
    
    
    
    19,489
    
    
    
    (18,346
    )
    
    
    419,134Expenditures for mining
interests
    
    
    57,915
    
    
    
    6,597
    
    
    
    124,801
    
    
    
    64,077
    
    
    
    20,229
    
    
    
    3,349
    
    
    
    187
    
    
    
    355
    
    
    
    277,510Total assets
    
    
    297,794
    
    
    
    931,291
    
    
    
    1,446,958
    
    
    
    288,265
    
    
    
    146,362
    
    
    
    41,878
    
    
    
    478,962
    
    
    
    434,472
    
    
    
    4,065,982
 
 (1)
    
    Includes results of operations for the period subsequent to February 14, 2005,
the date of acquisition of Wheaton.
 2004
    
    
    2003Corporate,Corporate, other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    other andRed Lake
    
    
    Wharf
    
    
    and eliminations
    
    
    Total
    
    
    Red Lake
    
    
    Wharf
    
    
    eliminations
    
    
    TotalRevenues
    
    $
    152,198
    
    
    $
    26,121
    
    
    $
    12,697
    
    
    $
    191,016
    
    
    $
    224,033
    
    
    $
    24,921
    
    
    $
    13,688
    
    
    $
    262,642Depreciation and depletion
    
    
    14,814
    
    
    
    6,003
    
    
    
    570
    
    
    
    21,387
    
    
    
    18,980
    
    
    
    5,876
    
    
    
    369
    
    
    
    25,225Earnings (loss) from
operations
    
    
    102,673
    
    
    
    3,584
    
    
    
    (20,297
    )
    
    
    85,960
    
    
    
    152,969
    
    
    
    102
    
    
    
    (15,926
    )
    
    
    137,145Expenditures for mining
interests
    
    
    49,547
    
    
    
    6,126
    
    
    
    452
    
    
    
    56,125
    
    
    
    65,191
    
    
    
    8,470
    
    
    
    867
    
    
    
    74,528Total assets
    
    
    282,801
    
    
    
    35,050
    
    
    
    383,667
    
    
    
    701,518
    
    
    
    204,955
    
    
    
    29,812
    
    
    
    403,756
    
    
    
    638,523




---



##### 




    
    Canada  Red Lake, Corporate and other
    
    Argentina  Alumbrera
    
    Mexico  Luismin (includes Luismin mines, Los Filos/Bermejal project, El Limón and other projects)
    
    Brazil  Amapari
    
    Australia  Peak
    
    United States  Wharf
    
    Cayman Islands  Silver Wheaton
 17.
    
    COMMITMENTS AND CONTINGENCIES
 (a)
    
    Commitments exist at Red Lake, Alumbrera, Luismin, Amapari, and Peak for capital
expenditures of approximately $122 million, of which $39.2 million relates to 2007 at Red
Lake. The Company rents premises and leases equipment under operating leases that expire
over the next five years. Operating lease expense in 2005 was $7,570,000 (2004 
$5,267,000; 2003  $6,672,000). Following is a schedule of future minimum rental and lease
payments required:
 2006
    
    $
    10,2922007
    
    
    3,6762008
    
    
    2,5702009
    
    
    5592010
    
    
    1417,111Thereafter
    
    
    Total future minimum payments required
    
    $
    17,111
 (b)
    
    During the year ended December 31, 2005, Goldcorp was served with Statements of Claim
with respect to a class action against, among others, the Company and certain of its
directors. The plaintiffs are seeking an unspecified amount of damages as a result of
stock options granted in September 2004. The claims allege that the defendants acted on
material non-public information at the time of the option grants. The Company believes that
the allegations are unfounded and intends to vigorously defend these claims.(c)
    
    Due to the size, complexity and nature of the Companys operations, various legal and
tax matters are outstanding from time to time. In the opinion of management, these matters
will not have a material effect on the Companys consolidated financial position or results
of operations.
 18.
    
    RELATED PARTY TRANSACTIONSDuring the year ended December 31, 2005, Goldcorp sold its holdings in three marketable
securities to a company owned by Mr. Robert McEwen, the former non-Executive Chairman and CEO of
Goldcorp. These were non-brokered transactions which were executed at market value based on the
average of the TSX closing price for the ten trading days prior to the sale agreements,
resulting in gains totaling approximately $4 million. During the year ended December 31, 2005,
the Company also sold its share ownership in Lexam Explorations Inc to a company owned by Mr.
McEwen for proceeds of $0.3 million.




---



##### 



19.
    
    RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 Consolidated Statement of Earnings (Loss)
 2005Alumbrera
    
    
    
    
    
    
    AsEquity
    
    
    Other US GAAP
    
    
    Reported
    
    
    Warrant
    
    
    Restated USCdn GAAP
    
    
    Adjustment (a)
    
    
    Adjustments
    
    
    US GAAP
    
    
    Adjustment (k)
    
    
    GAAPRevenues
    
    $
    896,408
    
    
    $
    (299,225
    )
    
    $
    
    
    
    $
    597,183
    
    
    $
    
    
    
    $
    597,183Operating expenses, exclusive of
depreciation and depletion
    
    
    304,032
    
    
    
    (100,266
    )
    
    
    
    
    
    
    203,766
    
    
    
    
    
    
    
    203,766Depreciation and depletion
    
    
    135,264
    
    
    
    (59,018
    )
    
    
    
    
    
    
    76,246
    
    
    
    
    
    
    
    76,246Corporate administration
    
    
    29,943
    
    
    
    
    
    
    
    
    
    
    
    29,943
    
    
    
    
    
    
    
    29,943Stock option expense
    
    
    13,876
    
    
    
    
    
    
    
    
    
    
    
    13,876
    
    
    
    
    
    
    
    13,876Exploration
    
    
    8,035
    
    
    
    
    
    
    
    
    
    
    
    8,035
    
    
    
    
    
    
    
    8,035Earnings from Operations
    
    
    405,258
    
    
    
    (139,941
    )
    
    
    
    
    
    
    265,317
    
    
    
    
    
    
    
    265,317Other income (expense)Interest and other income
    
    
    9,244
    
    
    
    3,670
    
    
    
    
    
    
    
    12,914
    
    
    
    
    
    
    
    12,914Gain on foreign exchange
    
    
    474
    
    
    
    31
    
    
    
    
    
    
    
    505
    
    
    
    
    
    
    
    505Gain on marketable securities, net
    
    
    10,142
    
    
    
    
    
    
    
    
    
    
    
    10,142
    
    
    
    
    
    
    
    10,142Dilution gain
    
    
    18,732
    
    
    
    
    
    
    
    
    
    
    
    18,732
    
    
    
    
    
    
    
    18,732Corporate transaction costs
    
    
    (3,592
    )
    
    
    
    
    
    
    
    
    
    
    (3,592
    )
    
    
    
    
    
    
    (3,592
    )Mark-to-market loss on share purchase
warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (435,533
    )
    
    
    (435,533
    )Equity earnings of Minera Alumbrera Ltd.
    
    
    
    
    
    
    92,728
    
    
    
    
    
    
    
    92,728
    
    
    
    
    
    
    
    92,728Earnings (loss) before taxes and
non-controlling interests
    
    
    440,258
    
    
    
    (43,512
    )
    
    
    
    
    
    
    396,746
    
    
    
    (435,533
    )
    
    
    (38,787
    )Income and mining taxes
    
    
    142,370
    
    
    
    (43,512
    )
    
    
    2,343
    (h)
    
    
    101,201
    
    
    
    
    
    
    
    101,201Non-controlling interests
    
    
    12,190
    
    
    
    
    
    
    
    
    
    
    
    12,190
    
    
    
    (17,269
    )
    
    
    (5,079
    )Net earnings (loss)
    
    $
    285,698
    
    
    $
    
    
    
    $
    
    
    
    $
    283,355
    
    
    $
    (418,264
    )
    
    $
    (134,909
    )Other comprehensive incomeUnrealized losses on securities, net of
reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    (2,648)
    (b)
    
    
    (2,648
    )
    
    
    
    
    
    
    (2,648
    )Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    (5,814)
    (i)
    
    
    (5,814
    )
    
    
    
    
    
    
    (5,814
    )Comprehensive income (loss) (g)
    
    $
    285,698
    
    
    $
    
    
    
    $
    (10,805
    )
    
    $
    274,893
    
    
    $
    (418,264
    )
    
    $
    (143,371
    )Earnings per shareBasic
    
    $
    0.91
    
    
    
    
    
    
    
    
    
    
    $
    0.90
    
    
    
    
    
    
    $
    (0.43
    )Diluted
    
    $
    0.83
    
    
    
    
    
    
    
    
    
    
    $
    0.82
    
    
    
    
    
    
    $
    (0.43
    )




---



##### 



Consolidated Statement of Earnings
 2004AsOther US GAAP
    
    
    Reported
    
    
    Warrant
    
    
    Restated USCdn GAAP
    
    
    Adjustments
    
    
    US GAAP
    
    
    Adjustment (k)
    
    
    GAAPRevenues
    
    $
    191,016
    
    
    $
    
    
    
    $
    191,016
    
    
    $
    
    
    
    $
    191,016Operating expenses, exclusive of
depreciation and depletion
    
    
    66,601
    
    
    
    
    
    
    
    66,601
    
    
    
    
    
    
    
    66,601Depreciation and depletion
    
    
    21,387
    
    
    
    
    
    
    
    21,387
    
    
    
    
    
    
    
    21,387Corporate administration
    
    
    10,367
    
    
    
    
    
    
    
    10,367
    
    
    
    
    
    
    
    10,367Stock option expense
    
    
    5,081
    
    
    
    
    
    
    
    5,081
    
    
    
    
    
    
    
    5,081Exploration
    
    
    6,701
    
    
    
    
    
    
    
    6,701
    
    
    
    
    
    
    
    6,701Earnings from Operations
    
    
    80,879
    
    
    
    
    
    
    
    80,879
    
    
    
    
    
    
    
    80,879Other income (expense)Interest and other income
    
    
    9,354
    
    
    
    
    
    
    
    9,354
    
    
    
    
    
    
    
    9,354Gain on foreign exchange
    
    
    211
    
    
    
    
    
    
    
    211
    
    
    
    
    
    
    
    211Loss on marketable securities, net
    
    
    (9,006
    )
    
    
    
    
    
    
    (9,006
    )
    
    
    
    
    
    
    (9,006
    )Mark-to-market loss on share purchase
warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,377
    
    
    
    7,377Earnings before taxes and
non-controlling interests
    
    
    81,438
    
    
    
    
    
    
    
    81,438
    
    
    
    7,377
    
    
    
    88,815Income and mining taxes
    
    
    30,091
    
    
    
    1,468
    (h)
    
    
    31,559
    
    
    
    
    
    
    
    31,559Net earnings
    
    $
    51,347
    
    
    $
    
    
    
    $
    49,879
    
    
    $
    7,377
    
    
    $
    57,256Other comprehensive income
    
    
    
    
    
    
    (1,468
    )Unrealized losses on securities, net of
reclassification adjustments
    
    
    
    
    
    
    (1,317
    ) (b)
    
    
    (1,317
    )
    
    
    
    
    
    
    (1,317
    )Cumulative translation adjustment
    
    
    
    
    
    
    41,459
    (i)
    
    
    41,459
    
    
    
    
    
    
    
    41,459Comprehensive income
    
    $
    51,347
    
    
    $
    38,674
    
    
    $
    90,021
    
    
    $
    7,377
    
    
    $
    97,398Earnings per shareBasic
    
    $
    0.27
    
    
    
    
    
    
    $
    0.26
    
    
    
    
    
    
    $
    0.30Diluted
    
    $
    0.27
    
    
    
    
    
    
    $
    0.26
    
    
    
    
    
    
    $
    0.30




---



##### 



Consolidated Statement of Earnings
 2003AsOther US GAAP
    
    
    Reported
    
    
    Warrant
    
    
    Restated USCdn GAAP
    
    
    Adjustments
    
    
    US GAAP
    
    
    Adjustment (k)
    
    
    GAAPRevenues
    
    $
    262,642
    
    
    $
    
    
    
    $
    262,642
    
    
    $
    
    
    
    $
    262,642Operating expenses, exclusive of
depreciation and depletion
    
    
    86,963
    
    
    
    
    
    
    
    86,963
    
    
    
    
    
    
    
    86,963Depreciation and depletion
    
    
    25,225
    
    
    
    
    
    
    
    25,225
    
    
    
    
    
    
    
    25,225Corporate administration
    
    
    10,303
    
    
    
    
    
    
    
    10,303
    
    
    
    
    
    
    
    10,303Stock option expense
    
    
    2,275
    
    
    
    
    
    
    
    2,275
    
    
    
    
    
    
    
    2,275Exploration
    
    
    3,006
    
    
    
    
    
    
    
    3,006
    
    
    
    
    
    
    
    3,006Earnings from operations
    
    
    134,870
    
    
    
    
    
    
    
    134,870
    
    
    
    
    
    
    
    134,870Other income (expense)Interest and other income
    
    
    8,905
    
    
    
    
    
    
    
    8,905
    
    
    
    
    
    
    
    8,905Loss on foreign exchange
    
    
    (1,164
    )
    
    
    
    
    
    
    (1,164
    )
    
    
    
    
    
    
    (1,164
    )Gain on marketable securities, net
    
    
    10,230
    
    
    
    
    
    
    
    10,230
    
    
    
    
    
    
    
    10,230Mark-to-market loss on share purchase
warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,903
    )
    
    
    (10,903
    )Earnings before taxes and
non-controlling interests
    
    
    152,841
    
    
    
    
    
    
    
    152,841
    
    
    
    (10,903
    )
    
    
    141,938Income and mining taxes
    
    
    54,037
    
    
    
    3,266
    (h)
    
    
    57,303
    
    
    
    
    
    
    
    57,303Cumulative effect of change in
accounting policy
    
    
    
    
    
    
    1,021
    (c)
    
    
    1,021
    
    
    
    
    
    
    
    1,021Net earnings (loss)
    
    $
    98,804
    
    
    $
    (4,287
    )
    
    $
    94,517
    
    
    $
    (10,903
    )
    
    $
    83,614Other comprehensive incomeUnrealized losses on securities, net of
reclassification adjustments
    
    
    
    
    
    
    4,781
    (b)
    
    
    4,781
    
    
    
    
    
    
    
    4,781Cumulative translation adjustment
    
    
    
    
    
    
    80,909
    (i)
    
    
    80,909
    
    
    
    
    
    
    
    80,909Comprehensive income
    
    $
    98,804
    
    
    $
    81,403
    
    
    $
    180,207
    
    
    $
    (10,903
    )
    
    $
    169,304Earnings per shareBasic
    
    $
    0.54
    
    
    
    
    
    
    $
    0.51
    
    
    
    
    
    
    $
    0.46Diluted
    
    $
    0.53
    
    
    
    
    
    
    $
    0.50
    
    
    
    
    
    
    $
    0.44




---



##### 



Consolidated Balance Sheets
 2005AlumbreraEquity
    
    
    Other US GAAP
    
    
    As Reported
    
    
    Warrant
    
    
    Restated USCdn GAAP
    
    
    Adjustment (a)
    
    
    Adjustments
    
    
    US GAAP
    
    
    Adjustment (k)
    
    
    GAAPAssetsCurrentCash and cash equivalents
    
    $
    562,188
    
    
    $
    (58,599
    )
    
    $
    
    
    
    $
    503,589
    
    
    $
    
    
    
    $
    503,589Other current assets
    
    
    210,163
    
    
    
    (96,618
    )
    
    
    3,858
    (b)
    
    
    117,403
    
    
    
    
    
    
    
    117,403772,351
    
    
    
    (155,217
    )
    
    
    3,858
    
    
    
    620,992
    
    
    
    
    
    
    
    620,992Mining interests
    
    
    2,980,762
    
    
    
    (724,663
    )
    
    
    
    
    
    
    2,256,099
    
    
    
    
    
    
    
    2,256,099Investment in Minera Alumbrera Ltd
    
    
    
    
    
    
    665,042
    
    
    
    
    
    
    
    665,042
    
    
    
    
    
    
    
    665,042Other non-current assets
    
    
    312,869
    
    
    
    (51,411
    )
    
    
    
    
    
    
    261,458
    
    
    
    21,485
    
    
    
    282,943$
    4,065,982
    
    
    $
    (266,249
    )
    
    $
    3,858
    
    
    $
    3,803,591
    
    
    
    21,485
    
    
    
    3,825,076LiabilitiesCurrent
    
    $
    190,810
    
    
    $
    (59,292
    )
    
    $
    
    
    
    $
    131,518
    
    
    
    
    
    
    
    131,518Derivative Liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    787,108
    
    
    
    787,108Non-current
    
    
    792,808
    
    
    
    (206,957
    )
    
    
    7,077
    (h)
    
    
    592,928
    
    
    
    
    
    
    
    592,928983,618
    
    
    
    (266,249
    )
    
    
    7,077
    
    
    
    724,446
    
    
    
    787,108
    
    
    
    1,511,554Non-controlling interests
    
    
    108,601
    
    
    
    
    
    
    
    
    
    
    
    108,601
    
    
    
    (46,410
    )
    
    
    62,191Shareholders equity
    
    
    2,973,763
    
    
    
    
    
    
    
    (3,219)
    (b,h)
    
    
    2,970,544
    
    
    
    (719,213
    )
    
    
    2,251,331$
    4,065,982
    
    
    $
    (266,249
    )
    
    $
    3,858
    
    
    $
    3,803,591
    
    
    $
    21,485
    
    
    $
    3,825,076
 Consolidated Balance Sheets
 2004AsOther US GAAP
    
    
    Reported
    
    
    Warrant
    
    
    Restated USCdn GAAP
    
    
    Adjustments
    
    
    US GAAP
    
    
    Adjustment (k)
    
    
    GAAPAssetsCurrentCash and cash equivalents
    
    $
    333,375
    
    
    $
    
    
    
    $
    333,375
    
    
    $
    
    
    
    $
    333,375Other current assets
    
    
    93,298
    
    
    
    6,506
    (b)
    
    
    99,804
    
    
    
    
    
    
    
    99,804426,673
    
    
    
    6,506
    
    
    
    433,179
    
    
    
    
    
    
    
    433,179Mining interests
    
    
    264,949
    
    
    
    
    
    
    
    264,949
    
    
    
    
    
    
    
    264,949Other non-current assets
    
    
    9,896
    
    
    
    
    
    
    
    9,896
    
    
    
    
    
    
    
    9,896$
    701,518
    
    
    $
    6,506
    
    
    $
    708,024
    
    
    
    
    
    
    $
    708,024LiabilitiesCurrent
    
    $
    26,656
    
    
    $
    
    
    
    $
    26,656
    
    
    
    
    
    
    
    26,656Derivative Liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,216
    
    
    
    28,216Non-current
    
    
    97,013
    
    
    
    4,734
    (h)
    
    
    101,747
    
    
    
    
    
    
    
    101,747123,669
    
    
    
    4,734
    
    
    
    128,403
    
    
    
    28,216
    
    
    
    156,619Shareholders equity
    
    
    577,849
    
    
    
    1,772          (b,h
    )
    
    
    579,621
    
    
    
    (28,216
    )
    
    
    551,405$
    701,518
    
    
    $
    6,506
    
    
    $
    708,024
    
    
    $
    
    
    
    $
    708,024




---



##### 



2005
    
    
    2004
    
    
    2003Consolidated Statements of Shareholders Equity
    
    Restated
    
    
    Restated
    
    
    RestatedCommon shares & share purchase warrantsIn accordance with Canadian GAAP
    
    $
    2,609,319
    
    
    $
    379,356
    
    
    $
    375,827Renunciation of tax deductions on flow-through shares (e)
    
    
    1,281
    
    
    
    1,281
    
    
    
    1,281Reclassification of Cdn $ share purchase warrants (k)
    
    
    (282,964
    )
    
    
    (10,231
    )
    
    
    (10,231
    )In accordance with US GAAP
    
    $
    2,327,636
    
    
    $
    370,406
    
    
    $
    366,877Accumulated Other Comprehensive IncomeCumulative translation adjustmentIn accordance with Canadian GAAP
    
    $
    101,927
    
    
    $
    107,741
    
    
    $
    66,282Realization of cumulative translation adjustment (f)
    
    
    3,371
    
    
    
    3,371
    
    
    
    3,371In accordance with US GAAP
    
    
    105,298
    
    
    
    111,112
    
    
    
    69,653Unrealized gains on available-for-sale securitiesIn accordance with Canadian GAAP
    
    
    
    
    
    
    
    
    
    
    Unrealized holding gains arising during the year, net of taxes of $2,993
(2004  $1,905 , 2003  $4,002) (b)
    
    
    11,972
    
    
    
    7,619
    
    
    
    16,007Reclassification adjustments for realized gains recorded in earnings, net of
taxes of $2,028 (2004  $278; 2003  $2,046) (b)
    
    
    (8,114
    )
    
    
    (1,113
    )
    
    
    (8,184
    )In accordance with US GAAP
    
    
    3,858
    
    
    
    6,506
    
    
    
    7,823Total Accumulated Other Comprehensive Income
    
    $
    109,156
    
    
    $
    117,618
    
    
    $
    77,476Stock options and additional paid in capitalIn accordance with Canadian GAAP
    
    $
    44,432
    
    
    $
    7,347
    
    
    $
    2,275Elimination of deficit with offsetting reduction to contributed surplus (d)
    
    
    70,573
    
    
    
    70,573
    
    
    
    70,573Adjusted reduction to contributed surplus resulting from the amalgamation
with CSA Management Inc
    
    
    (56,276
    )
    
    
    (56,276
    )
    
    
    (56,276
    )In accordance with US GAAP
    
    $
    58,729
    
    
    $
    21,644
    
    
    $
    16,572Retained earnings (deficit)In accordance with Canadian GAAP
    
    $
    218,085
    
    
    $
    83,405
    
    
    $
    63,358Realization of cumulative translation adjustment (f)
    
    
    (3,371
    )
    
    
    (3,371
    )
    
    
    (3,371
    )Elimination of deficit with offsetting reduction to contributed surplus (d)
    
    
    (70,573
    )
    
    
    (70,573
    )
    
    
    (70,573
    )Adjusted reduction to contributed surplus resulting from the amalgamation
with CSA Management Inc
    
    
    56,276
    
    
    
    56,276
    
    
    
    56,276Renunciation of tax deductions on flow-through shares (e)
    
    
    (1,281
    )
    
    
    (1,281
    )
    
    
    (1,281
    )Elimination of effect of use of substantively enacted rates on future income
taxes (h)
    
    
    (7,077
    )
    
    
    (4,734
    )
    
    
    (3,266
    )Mark-to-market loss on share purchase warrants (k)
    
    
    (436,249
    )
    
    
    (17,985
    )
    
    
    (25,362
    )In accordance with US GAAP
    
    $
    (244,190
    )
    
    $
    41,737
    
    
    $
    15,781Shareholders equityIn accordance with Canadian GAAP
    
    $
    2,973,763
    
    
    $
    577,849
    
    
    $
    507,742In accordance with US GAAP
    
    $
    2,251,331
    
    
    $
    551,,405
    
    
    $
    476,706




---



##### 



Consolidated Statements of Cash Flows
    
    2005
    
    
    2004
    
    
    2003Operating activitiesOperating activities under Canadian GAAP
    
    $
    465,756
    
    
    $
    53,103
    
    
    $
    95,166Alumbrera equity adjustment (a)
    
    
    (18,254
    )
    
    
    
    
    
    
    Operating activities under US GAAP
    
    $
    447,502
    
    
    $
    53,103
    
    
    $
    95,166Investing activitiesInvesting activities under Canadian GAAP
    
    $
    (220,808
    )
    
    $
    (73,093
    )
    
    $
    (33,124
    )Alumbrera equity adjustment (a)
    
    
    6,597
    
    
    
    
    
    
    
    Investing activities under US GAAP
    
    $
    (214,211
    )
    
    $
    (73,093
    )
    
    $
    (33,124
    )Financing activitiesFinancing activities under Canadian and US GAAP
    
    $
    (21,495
    )
    
    $
    (49,551
    )
    
    $
    (1,396
    )Alumbrera equity adjustment (a)
    
    
    (46,942
    )
    
    
    
    
    
    
    Financing activities under US GAAP
    
    $
    (68,437
    )
    
    $
    (49,551
    )
    
    $
    (1,396
    )Effect of exchange rate changes on cash
    
    
    5,360
    
    
    
    23,962
    
    
    
    57,475Increase in cash and cash equivalents under US GAAP
    
    $
    170,214
    
    
    $
    (45,579
    )
    
    $
    118,121Cash and cash equivalents, beginning of year under US GAAP
    
    
    333,375
    
    
    
    378,954
    
    
    
    260,833Cash and cash equivalents, end of year under US GAAP
    
    $
    503,589
    
    
    $
    333,375
    
    
    $
    378,954
   (a)
    
    Under Canadian GAAP, the Company accounted for its joint venture interests in Alumbrera
on a proportionate consolidated basis. Under US GAAP, the Company is required to equity
account for its investment in Alumbrera and present in operations its proportionate share
of Alumbrera net earnings in accordance with US GAAP.(b)
    
    Under US GAAP (SFAS 115), the Companys investments in securities would be classified
as available-for-sale securities and carried at fair value. The unrealized holding gains on
available-for-sale securities are not recognized under Canadian accounting principles, but
are recognized under United States accounting principles as a component of comprehensive
income and reported as a net amount in a separate component of shareholders equity until
realized. The amounts recorded in comprehensive income are shown net of tax expense
(recovery) of ($662,000) (2004  ($329,000); 2003  $1,195,000).(c)
    
    On January 1, 2003, the Company adopted SFAS 143, Accounting for Asset Retirement
Obligations which is consistent with the Canadian standard, however, under US GAAP, prior
periods are not restated and the cumulative effect of the adoption of the standard is
recorded in the period of adoption with the effect for 2003 being a decrease in earnings of
$1,021,000 ($0.01 per share).(d)
    
    United States accounting principles do not allow for the use of contributed surplus to
eliminate a deficit.(e)
    
    Under US GAAP, the renunciation of tax deductions to holders of flow-through shares is
treated as a future tax expense rather than as a cost of issuing equity as required by
Canadian accounting principles.(f)
    
    Under US GAAP a proportionate amount of the cumulative translation adjustment account
is not recognized in earnings when there is a reduction in the Companys net investment in
a subsidiary as a result of dividend distributions.




---



##### 



(g)
    
    Under US GAAP, SFAS 130, Reporting Comprehensive Income establishes rules for the
reporting and display of comprehensive income and its components. Comprehensive income is
net income, plus certain other items that are recorded directly to shareholders equity
such as foreign currency translation adjustments and unrealized gains (losses) on
marketable securities.(h)
    
    In 2003, certain changes to income tax legislation affecting mining companies became
law; however, the enabling regulations which quantify the deduction for mining taxes paid
permitted by this change in legislation (which is considered to substantively enacted for
Canadian GAAP purposes) had not yet received the required approval to be considered enacted
for US GAAP purposes. Consequently for US GAAP purposes the 2003 results have been
adjusted to remove the benefit accrued for the deduction for income tax purposes of actual
provincial and other Crown royalties and mining taxes paid as at December 31, 2003. The
benefits of this change in legislation will be recognized for US GAAP purposes when the
approval for the amendments to the regulations has been given. The net effect of the
restatement is to increase the tax provision for 2003 by an amount of $3,266,000. These
legislative changes still remained in draft at December 31, 2005, hence the additional GAAP
difference for 2004 was $1,468,000 and for 2005 is $2,343,000.(i)
    
    Under US GAAP, the change in cumulative translation adjustment recorded in the balance
sheet for Canadian GAAP is recorded in the calculation of comprehensive income for US GAAP.(j)
    
    Stock optionsThe Company has a stock-based employee compensation plan which is described more fully in
Note 14 (b). Prior to 2003, the Company accounted for those plans under the recognition and
measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. No stock-based employee compensation cost was reflected in 2002 net
income, as all options granted under those plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. Effective January 1, 2003, the
Company adopted the fair value recognition provisions of SFAS 123, Accounting for
Stock-Based Compensation, prospectively to all employee awards granted, modified, or settled
after January 1, 2003. Awards under the Companys plans vest over three years. Therefore,
the cost related to stock-based employee compensation included in the determination of net
income for 2004 and 2003 is less than that which would have been recognized if the fair value
based method had been applied to all awards since the original effective date of SFAS 123. A
table has been provided below to illustrate the effect on earnings and earnings per share if
the fair value based method had been applied to all outstanding and unvested awards in 2005,
2004 and 2003.The fair value of these options has been estimated at the date of grant using a Black-Scholes
option pricing model with the following assumptions for 2005, 2004, and 2003, respectively: a
risk-free interest rate of 3%, 4%, and 4%, respectively; a dividend yield of 1% for each
year; volatility factors for the expected market price of the Companys common stock of 30%,
42%, and 45%, respectively; and a weighted average expected life of the options of four years
in 2005 and five years f0r 2004 and 2003.The weighted average grant date fair values of options issued in 2005, 2004 and 2003 were
C$4.88, C$6.29, and C$6.96, respectively. The estimated fair value of the options is
expensed over the options vesting period, which is three years.The following are the Companys pro forma earnings in accordance with United States
accounting principles:
 2005
    
    
    2004
    
    
    2003Restated
    
    
    Restated
    
    
    RestatedNet earnings for the year, US GAAP
    
    $
    (134,909
    )
    
    $
    57,256
    
    
    $
    83,614Deduct: Unrecorded stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects
    
    
    (320
    )
    
    
    (1,480
    )
    
    
    (4,186
    )Pro forma net earnings
    
    $
    (135,229
    )
    
    $
    55,776
    
    
    $
    79,428Pro forma net earnings per share, US GAAPBasic
    
    $
    (0.43
    )
    
    $
    0.29
    
    
    $
    0.43Diluted
    
    
    (0.43
    )
    
    
    0.29
    
    
    
    0.42




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##### 



(k)
    
    Share purchase warrantsFor Canadian GAAP purposes, all of the Companys outstanding share purchase warrants are
classified and accounted for as equity on the Companys financial statements. The
interpretation of US GAAP, in accordance with SFAS 133, Accounting for Derivative
Instruments and Hedging Activities,currently requires share purchase warrants with an
exercise price denominated in a currency other than the Companys functional currency be
classified and accounted for as a financial liability and fair valued. As a result of
applying this interpretation, the Company has restated its December 31, 2005, 2004, and 2003
US GAAP net earnings to reflect the mark-to-market impacts related to fair valuation of these
series of warrants. The net effect of the restatement is to reduce net earnings in 2005 by
an amount of $418,264,000 arising from the recognition of a mark-to-market loss on the share
purchase warrants (2004  mark-to-market gain of $7,377,000 and 2003  mark-to-market loss of
$10,903,000). This non-cash restatement has no effect on the Companys operations, cash
flow, or liquidity for the respective restated periods.In addition, the Company has restated its Goodwill arising from the purchase of Wheaton River
in 2005 in the amount of $21,485,000 due to the impact of this interpretation on the net
asset value of Silver Wheaton, a subsidiary acquired as part of that purchase.(l)
    
    Financial statement presentationFor US GAAP purposes, the measure Earnings from mine operations is not a recognized term
and would therefore not be presented instead, Earnings from operations has been presented.(m)
    
    Pro forma information on business combinationsUnder US GAAP, SFAS 141 requires disclosure of certain pro forma information when a business
combination is effected. The following table presents the pro forma results of operations
for informational purposes, assuming that the Company had acquired Wheaton at the beginning
of 2004.
 2005
    
    
    2004Restated
    
    
    RestatedRevenues
    
    $
    952,602
    
    
    $
    610,198Net earnings
    
    
    (118,663
    )
    
    
    162,897Pro forma basic earnings per share
    
    
    (0.38
    )
    
    
    0.86Pro forma diluted earnings per share
    
    
    (0.38
    )
    
    
    0.84
 The pro forma results of operations give effect to certain adjustments including the increase
in depletion, depreciation and amortization resulting from adjustments to asset carrying
values on the acquisition of Wheatons mine assets. The pro forma basic and diluted earnings
per share have been calculated assuming the special warrants and common shares issued in
connection with the acquisition of Wheaton were issued at the beginning of 2004. This
information may not necessarily be indicative of the future combined results of operations of
the Company.(n)
    
    Impact of Recent United States Accounting PronouncementsIn March 2005, the Emerging Issues Committee issued EITF 04-3, Mining Assets  Impairment and
Business Combinations, which states that an entity should include Value Beyond Proven and
Probable Reserves and Resources (VBPP) in the value




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##### 



allocated to mining assets in a purchase price allocation to the extent that a market
participant would include VBPP in determining the fair value of the assets. EITF 04-3 also
states that an entity should include the effects of anticipated fluctuations in the future
market price of minerals in determining the fair value of mining assets in a purchase price
allocation in a manner that is consistent with the expectations of marketplace participants.
In addition, EITF 04-3 states that an entity should include the cash flows associated with
VBPP as well as the effects of anticipated fluctuations in the market price of minerals in
estimates of future cash flows (both undiscounted and discounted) used for determining
whether a mining asset is impaired. The Companys current accounting policy of allocating
the cost of silver contracts and mining interests separately to reserves, resources and
exploration potential and depreciating the value attributed to reserves on a unit-of-sale
basis over the estimated recoverable reserves for each specific contract, is in compliance
with EITF 04-3.In March 2005, the Emerging Issues Committee issued EITF 04-6, Accounting for Stripping Costs
Incurred During Production in the Mining Industry, which states that costs incurred during
production from the removal of overburden and waste material should be considered variable
production costs included in the costs of the inventory produced during the period that the
stripping costs are incurred. Once production has commenced from a mine, production-related
stripping costs will be accounted for as a cost of current production and, therefore as a
component of the cost of any inventory extracted from the mine and held at period end. The
consensus is effective for the first reporting period in fiscal years beginning after
December 15, 2005. The Company is currently evaluating the possible impact of this
pronouncement.In November 2005, the FASB issued FASB Staff Position (FSP) FAS 115-1 and FAS 124-1  The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. This
FSP addresses the determination as to when an investment is considered impaired, whether that
impairment is other than temporary, and the measurement of an impairment loss. This FSP also
includes accounting considerations subsequent to the recognition of an other-than-temporary
impairment and requires certain disclosures about unrealized losses that have not been
recognized as other-than-temporary impairments. The guidance in this FSP FAS 115-1 and FAS
124-1 is applicable to reporting periods beginning after December 15, 2005. Management does
not expect the adoption of this FSP to have a material effect on the Companys consolidated
financial position and results of operations.In December 2004, the FASB issued SFAS No. 123 (R)  Share-Based Payment, which replaces SFAS
No. 123 Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25 
Accounting for Stock Issued to Employees. In March 2005, the Securities and Exchange
Commission (SEC) issued Staff Accounting Bulletin No. 107  Share-Based Payment, which
provides interpretive guidance related to SFAS No. 123 (R). SFAS No. 123 (R) requires
compensation costs related to share-based payment transactions to be recognized in the
financial statements. With limited exceptions, the amount of compensation cost is measured
based on the grant-date fair value of the equity or liability instruments issued. SFAS No.
123 (R) requires liability awards to be re-measured each reporting period and compensation
costs to be recognized over the period that an employee provides service in exchange for the
award. Management plans to adopt this statement on the modified prospective basis beginning
January 1, 2006, and does not expect adoption of this statement to have a material effect on
the Companys consolidated financial position and results of operations. Subsequent to
adoption of this statement, share-based benefits will be valued at fair value using the
Black-Scholes option pricing model for option grants and the grant date fair market value for
stock awards. Compensation amounts so determined will be expensed over the applicable vesting
period.In March, 2005, the FASB issued FIN 47, Accounting for Conditional Asset Retirement
Obligation  an interpretation of FASB 143. FIN 47 provides guidance that an entity must
record a liability even if the obligation is conditional upon the occurrence of a future
event (e.g. plant shutdown), unless it is not possible to make a reasonable estimate of the
obligation. It also provides criteria for determining when an asset retirement obligation
may be estimated reasonably. The interpretation is effective no later than the end of fiscal
years ending after December 15, 2005. Retroactive application for interim financial
information is permitted but not required. The Company has adopted this standard which did
not have a significant impact on its results of operations.




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##### 



In May 2005, the FASB issued SFAS 154  Accounting Changes and Error Corrections, a
replacement of APB Opinion 20 and FASB Statement 3. This Statement changes the requirements
for the accounting for and reporting of a change in accounting principle and applies to all
voluntary changes in accounting principle. It also applies to changes required by an
accounting pronouncement if in the unusual instance that the pronouncement does not include
specific transition provisions. The Statement is effective for accounting changes made in
fiscal years beginning after December 15, 2005. Management does not expect the adoption of
this Statement to have a material effect on the Companys consolidated financial position and
results of operations.The FASB issued SFAS 153  Exchanges of Non-monetary Assets, an amendment of APB Opinion 29.
This Statement amends Opinion 29 to eliminate the exception for non-monetary exchanges of
similar productive assets and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. A non-monetary exchange has
commercial substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The Statement is effective for fiscal periods
beginning after June 15, 2005. Management does not expect the adoption of this Statement to
have a material effect on the Companys consolidated financial position and results of
operations.In November 2005, the FASB concluded that in their proposed Accounting for Uncertain Tax
Positions  an Interpretation of FASB Statement No. 109, a benefit recognition model with a
two-step approach would be used, with a more-likely-than-not recognition criterion and a best
estimate measure attribute. The first step is to evaluate the tax position for recognition by
determining if the weight of available evidence indicates it is more-likely-than-not, based
solely on the technical merits, that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step is to measure
the appropriate amount of the benefit to recognize, which will be measured using the best
estimate of the amount that will be sustained. The tax position should be derecognized when
it is no longer more-likely-than-not of being sustained. In January 2006, the FASB concluded
that the final Interpretation will be effective as of the beginning of the first annual
period beginning after December 31, 2006. The Company is currently evaluating the
implications of this Interpretation.In February 2006, the FASB issued SFAS 155 Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements No. 133 and 140. This Statement resolves issues
addressed in Statement 133 Implementation Issue No. D1, Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets. This Statement:
 
    
    Permits fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation
    
    Clarifies which interest-only strips and principal-only strips are not
subject to the requirements of Statement 133
    
    Establishes a requirement to evaluate interests in securitized financial
assets to identify interests that are freestanding derivatives or that are
hybrid financial instruments that contain an embedded derivative requiring
bifurcation
    
    Clarifies that concentrations of credit risk in the form of subordination
are not embedded derivatives
    
    Amends Statement 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument.




---



##### 



20.
    
    SUBSEQUENT EVENTS
 (a)
    
    On October 30, 2005, Goldcorp entered into an agreement with Barrick Gold Corporation
(Barrick) to acquire certain mining assets and interests. Barrick has offered to acquire
all the outstanding shares of Placer Dome Inc (Placer Dome) for approximately $10.1
billion in shares and cash and in a separate agreement, upon closing of Barricks
transaction with Placer Dome, Goldcorp has agreed to purchase from Barrick certain of
Placer Domes Canadian and other assets for cash of approximately $1.485 billion, subject
to adjustment. On March 3, 2006, Barrick owned approximately 94% of Placer Dome and is
proceeding with a compulsory acquisition to acquire the remaining outstanding shares. The
Goldcorp transaction is expected to close on April 1, 2006, following Barricks acquisition
of 100% of the Placer Dome common shares.Subject to any required consents and government approvals, Goldcorp will acquire Placer
Domes interests in the Campbell, Porcupine and Musselwhite gold mines in Ontario, and the La
Coipa gold/silver mine in Chile. Goldcorp will also acquire 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.In order to fund this proposed transaction, Goldcorp intends to use a portion of its current
cash balances, $500 million from its existing revolving credit facilities, and new credit
facilities of $900 million. The new $900 million credit facilities will be 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 this facility exceeds $450 million. Undrawn amounts will be subject to a
0.15% to 0.25% per annum commitment fee dependent on the Companys leverage ratio. All
amounts drawn will be required to be refinanced or repaid within two years of the closing
date.This business combination will be accounted for as a purchase transaction, with Goldcorp
being identified as the acquirer and the Placer Dome operations as the acquiree. The results
of operations of the acquired assets will be included in the consolidated financial
statements of Goldcorp from the date of acquisition. After consummation of the proposed
acquisition of Placer Dome operations and assets, Goldcorp will complete an exercise to value
the identifiable assets and liabilities acquired, including any goodwill that may arise in
the acquisition.(b)
    
    On December 5, 2005, the Company announced that it had entered into an agreement with
Virginia Gold Mines Inc (Virginia) to acquire Virginias Éléonore gold project in Quebec
pursuant to a plan of arrangement involving Virginia. Under the agreement, shareholders of
Virginia will receive 0.4 of a Goldcorp common share and 0.5 of a share in a new public
exploration company for each issued and outstanding Virginia share. Virginia will be
acquired by Goldcorp and Goldcorp will retain the Éléonore project. The new public
exploration company will hold all of the other assets of Virginia, including net working
capital, cash to be received prior to closing from the exercise of Virginia options and
warrants, its non-Éléonore exploration assets and a sliding scale 2% net smelter return
royalty on the Éléonore project. Based on the 10-day weighted average trading price for
Goldcorps common shares on the Toronto Stock Exchange of C$24.70, the transaction is
valued at approximately $445 million. Goldcorp will issue 19.6 million common shares
pursuant to the transaction, representing approximately 5% of the total common shares
outstanding after giving effect to this transaction. Completion of the transaction is
subject to approval by Virginia shareholders and receipt of regulatory approvals and is
expected to close during April, 2006.(c)
    
    On February 13, 2006, Goldcorp announced that it had agreed to amend its existing
silver purchase agreement with Silver Wheaton, in connection with Goldcorps plans to
substantially increase its investment in exploration and development at its San Dimas mine
in Mexico.Under the existing silver purchase agreement dated October 15, 2004, Silver Wheaton is
entitled to purchase all of the silver produced by Goldcorps Mexican operations, Luismin,
for a per ounce cash payment of the lesser of $3.90 and the prevailing market price (subject
to an inflationary adjustment commencing in 2007). Further, Luismin is required to deliver a
minimum




---



##### 



of 120 million ounces over the 25 year contract period and Silver Wheaton is obligated to pay
50% of any capital expenditures made by Luismin at its mining operations in excess of 110% of
the projected capital expenditures outlined in the agreement.Goldcorp and Silver Wheaton have agreed to amend the existing agreement, increasing the
minimum number of ounces of silver to be delivered over the 25 year contract 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 will issue to Goldcorp 18 million common shares representing 9.8% of the
outstanding shares of Silver Wheaton valued at approximately $130 million, and a $20 million
promissory note for total consideration of approximately $150 million, increasing Goldcorps
ownership to 62%, or 126 million common shares of Silver Wheaton. Goldcorp does not have any
present intention to acquire ownership of, or control over, any additional securities of
Silver Wheaton.(d)
    
    On February 23, 2006, Silver Wheaton announced that it had agreed to purchase 4.75
million ounces of silver per year, for a period of 20 years, from Glencore International
AG, equivalent to the production from their Yauliyacu mining operations in Peru. With this
acquisition, Silver Wheaton is expected to have annual silver sales of over 15 million
ounces in 2006, increasing to 20 million ounces by 2009 and thereafter.Silver Wheaton will pay an upfront payment of $285 million, comprised of $245 million in cash
and a $40 million promissory note, and $3.90 per ounce of silver delivered under the contract
(subject to an inflationary adjustment after three years).Yauliyacu is a low-cost silver/lead/zinc mine located in central Peru which has been in
continuous operation for more than 100 years and is expected to produce an average of 6
million ounces of silver per year during the term of the contract. In the event that silver
produced at Yauliyacu in any year totals less than 4.75 million ounces, the amount sold to
Silver Wheaton in subsequent years will be increased to make up for the shortfall, so long as
production allows.In order to fund the $245 million cash consideration, Silver Wheaton intends to use cash on
hand of $120 million, together with $125 million of bank debt.Closing of the transaction is subject to execution of definitive agreements and receipt of
all regulatory approvals and third-party consents, including acceptance by the Toronto Stock
Exchange. The transaction is expected to close by March 15, 2006.




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##### 



HEAD OFFICE         goldcorp.com
 TORONTO OFFICE
 AUSTRALIA OFFICE
 MEXICO OFFICE   th
 INVESTOR RELATIONS      info@goldcorp.com
 DIRECTORS     Chairman
 EXECUTIVE OFFICERS   President & Chief Executive Officer   Executive Vice-President & Chief Operating Officer   Executive Vice-President & Chief Financial Officer   Executive Vice-President & President Luismin SA de CV
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