Goldcorp Posts Record Gold Production In Third Quarter But Ends With Net Loss

By Paul Ploumis (ScrapMonster Author)

October 30, 2015 12:39:49 AM

(Kitco News) - Goldcorp Inc. (TSX: G, NYSE: GG) reported a net loss for the third quarter on Thursday even though gold production surged  to a record high.

The company listed a net loss of $192 million, or 23 cents per share, compared  to a net loss of $44 million, or 5 cents, for the same period of 2014. The adjusted net loss was $37 million, or 4 cents per share, compared to adjusted net earnings of $70 million, or 9 cents, for the third quarter of 2014.  Included in the adjusted net loss is a reduction in the carrying values of inventory stockpiles of $40 million, or 5 cents a share.

The company reported record third-quarter gold production of 922,200 ounces, an increase of 42% compared to gold production of 651,700 ounces in the third quarter of 2014. The average price received declined, however, to $1,114 from $1,266 a year ago.

Silver production totaled 11.3 million ounces, up from 7.8 million ounces in the prior year's third quarter.  All-in sustaining costs were $848 per ounce of gold for the third quarter of 2015 compared to $1,066 per ounce a year ago.

Free cash flow was $243 million before dividends and $168 million after dividends, Goldcorp said.

“Our third-quarter results highlight the essence of Goldcorp's investment proposition: growing gold production, declining all-in sustaining costs and decreasing capital spending resulting in strong, sustained free cash flow, despite lower metals prices," said Chuck Jeannes , Goldcorp president and chief executive officer.

Goldcorp reconfirmed 2015 company-wide production guidance, expected to be at the upper end of a range of 3.3 million and 3.6 million gold ounces.  All-in sustaining costs are expected to be between $850 and $900 per gold ounce, $500 and $550 per ounce on a by-product basis and $625 to $675 per ounce on a co-product basis.

The company continues to study a “folding” issue at its Éléonore mine in the James Bay region of Quebec. Goldcorp declared commercial production at Éléonore  in April.

Third-quarter gold production at the mine rose from the prior quarter to 86,700 ounces. However, in early September, Goldcorp cut its full-year output forecast for this mine due to higher-than-expected “folding” of underground rock in the Roberto deposit that resulted in lower grades.

“The folding is of varying intensities and is estimated to affect approximately 10% of the overall Éléonore deposit,” the company said in its earnings release. “The Éléonore team continues to work on adjusting stope designs to minimize these impacts.”

Courtesy: Kitco News