Goldcorp lowers guidance due to drought and production delays

Goldcorp (NYSE:GG), the world's second-largest gold miner, said expected gold production would drop 8% due to problems at Peñasquito and Red Lake.

The company's full-year 2012 gold production guidance has been revised to between to 2.35 and 2.45 million ounces compared to previous guidance of 2.6 million ounces.

Red Lake Production was affected by the need for rock de-stressing cuts and inconsistent mineralization.

The Peñasquito Mine was slowed by lack of water in June due to a prolonged drought in the region. The company says it is drilling more wells and trying to increase water reclaimation.

"Due to the lower expected production, total cash cost guidance has also been revised, to $310 to $340 per ounce of gold on a by-product basis(2) and $625 to $650 per ounce on a co-product basis," said the company in a news release.

"This compares to previous guidance of $250 to $275 per ounce on a by-product basis and $550 to $600 per ounce on a co-product basis."

Silver is also down to 30-31 million ounces compared to previous guidance of 34 million ounces.

"We are disappointed with reducing production guidance due to operational issues at our two most important mines," said Chuck Jeannes, Goldcorp President and Chief Executive Officer.

"Our focus is on addressing these issues promptly and in a manner supporting the long-term opportunities at these key assets.