Goldcorp’s profit down despite improved gold sales
Canadian miner Goldcorp Inc. (TSX:G) (NYSE:GG), which dropped its hostile attempt to take over Osisko Mining (TSX:OSK) last week, posted Thursday first-quarter results that —while lower than previous years— came in well ahead of analyst expectations.
The Vancouver-based firm, at $22.5 billion the world’s second most valuable gold miner after Barrick Gold (TSX:ABX), sad it earned US$98-million in its latest quarter as its gold production costs fell sharply compared with a year ago and gold production increased.
“2014 is a year of significant forecast growth for Goldcorp, and solid first quarter production and lower all-in sustaining costs represent a strong start toward the achievement of our guidance,” Goldcorp president and chief executive Chuck Jeannes said in a statement.
Like its peers, the gold miner has faced slumping metal prices, with its average realized gold price dropping to $1,297 an ounce in the quarter from $1,622 last year.
The company’s output however climbed to 679,900 ounces from 614,600 ounces, while all-in sustaining cash costs fell 26% to $840 an ounce from $1,134 an ounce a year earlier.
While watching its margins, the miner said it still plans to increase production by about 50% over the next two years as it starts up new mines in Canada and Argentina.
It also said it is still in talks to restart production at its Los Filos mine in Mexico, suspended since April 2, and “believes that ultimately an agreement can be reached.”
However, Mexican landowners are challenging Goldcorp’s alleged intentions to renew a land use agreement in order to restart operations at its mine in Guerrero.
“The company might be telling their investors that they are interested in negotiating, but we do not see that reflected here,” said in a statement the President of the organization of local landowners known as an ejido, Roberto Guzmán Montiel.
The ongoing dispute in Mexico could affect 2014 production at Los Filos, which Goldcorp said would be between 330,000 and 345,000 ounces.
The company scored a big win yesterday in Chile, after an appeals court rejected an attempt to halt its $3.9 billion El Morro gold and copper mine, clearing the way for the project to go ahead.