Lower ore grades at its flagship Red Lake Mine in Ontario did not prevent Goldcorp (TSX:G) from achieving a $479 million profit in the first quarter.
Despite producing and selling less gold than the first three months of last year, the world's second biggest gold miner posted revenues of $1.3 billion, an 11% increase from the first quarter of 2011. Silver production was up by half a million ounces compared to the same period last year.
Explaining the lower gold production (524,700 oz vs 637,000 oz in Q1 2011), Goldcorp CEO Chuck Jeannes said "Solid operating results throughout most of our mine portfolio were offset by a challenging first quarter at Red Lake."
"Adverse ground conditions at Red Lake delayed the development of new mining faces in the High Grade Zone which, taken together with lower grade in other areas of the mine, led to our slow start to 2012."
Gold production at the mine fell to 114,200 ounces compared to 186,100 oz in the first three months of 2011. Produced gold was also down at the Musselwhite mine, Los Filos, El Sauzal, Marlin, and Alumbrera, but up at the Wharf mine, Marigold, Peñasquito and Porcupine.
The company with mines and exploration projects in Canada, US, Mexico, Guatemala and Argentina said it is targetting 2.6 million ounces of gold production in 2012 at cash costs of $250-$275 per ounce.
Goldcorp stock rose 1.35% to close at $40.40 on Wednesday, clawing back some of the value lost earlier in the week when G closed down 3.3% and nearing the 52-week low of $39.12.