Goldcorp slashes costs 30%

Goldcorp (TSE:G, NYSE:GG) today reported better than expected quarterly revenues of $1.1 billion which generated net earnings of $164 million.

The Vancouver-based company also announced second quarter gold production and sales increasing over last year's second quarter despite the loss of gold production from the recently-divested Marigold mine and lower production from Los Filos as a result of a 43-day work stoppage.

Gold sales in the second quarter were 639,500 ounces on production of 648,700 ounces compared to sales of 624,300 ounces on production of 646,000 ounces in the second quarter of 2013.

Silver production totalled 9.0 million ounces compared 7.2 million ounces in the prior year's second quarter.

Golcorp, the world's most valuable gold miner with a market capitalization of $24.6 billion, said increased production efficiencies and lower sustaining capital led to a 30% decrease in all-in sustaining costs to $852 per ounce of gold compared to $1,227 per ounce in the second quarter of 2013.

"Continued solid production and cost performance across the portfolio contributed to strong financial results in the second quarter," said Chuck Jeannes, Goldcorp President and Chief Executive Officer.

"Cost improvements realized through our Operating for Excellence efficiency program were particularly impressive at Peñasquito. Those savings, along with grades and recoveries contributed to earnings from Peñasquito mine operations of approximately $130 million in the quarter.

"In addition, the three new gold projects under construction that underpin Goldcorp's leading growth profile continued to advance steadily. We were very pleased to announce last week the commencement of gold production at Cerro Negro on schedule and within our capital cost guidance.

"This achievement signals the start of a prolonged period of increased production, decreasing costs and reduced capital spending for Goldcorp, resulting in significant expected free cash flow generation in 2015 and beyond."