Goldcorp takes close to $2 billion writedown

Adding to the growing list of miners reporting losses, Canada’s Goldcorp Inc. (TSX:G)  logged Thursday a massive net loss of $1.93 billion for the second quarter, compared with a profit of $268 million in 2012, as it took a large writedown on the Peñasquito mine in Mexico.

The company, which keeps its books in US dollars, posted adjusted earnings about 50% lower than last year’s, diving to $117 million from $332 million. Its all-in costs in the quarter were $1,279 an ounce, which was not far below its average realized gold price of $1,358.

The new world’s largest gold miner by market value, which earned its crown after the share price of fellow Canadian Barrick Gold (TSX, NYSE:ABX) fell to a 20-year low late April,

“Peñasquito continues to possess strong exploration upside, but due to lower metals prices, the current in situ market value of exploration potential has decreased significantly,” CEO Chuck Jeannes said in the statement.

RELATED: Carnage among gold stocks as gold price rally evaporates

As most major mining companies, Goldcorp plans to reduce capital spending and conserve cash. The miner said it expects to cut 2013 spending by $200 million, even as it continues to build three new mines.

The Vancouver-based gold giant is also slashing its exploration and general and administrative expenses.

138 0

More Gold News