Goldcorp Posts 2Q Loss On Reduced Production; Two Projects Approved

Published: Jul 28, 2016 15:59

Save

Goldcorp Inc. (TSX: G, NYSE: GG) Wednesday reported a net loss in the second quarter on lower production.

By Kitco News

Wednesday July 27, 2016 20:33

(Kitco News) - Goldcorp Inc. (TSX: G, NYSE: GG) Wednesday reported a net loss in the second quarter on lower production that was expected and also announced a decision to proceed with expansions at the Peñasquito and Musselwhite mines.

Goldcorp listed a net loss of $78 million, or 9 cents per share, compared to net earnings of $392 million, or 47 cents, in the year-ago period. Net earnings in 2015 included non-recurring after-tax gains on the sale of non-core assets of $358 million, or 43 cents per share.

Gold production from April through June was 613,400 ounces at all-in sustaining costs of $1,067 per ounce, compared to 908,000 ounces at AISC of $853 per ounce a year ago, the company said.

Goldcorp officials said they expected lower gold production in the second quarter mainly due to planned lower ore grades, a 10-day mill shutdown for planned maintenance at Peñasquito and the exhaustion of surface stockpiles at Cerro Negro. Further, output was hurt by a slower-than-expected ramp-up after the mill shutdown at Peñasquito and the decision to accelerate a large workforce reduction at Cerro Negro.

Still, the company maintained 2016 guidance for gold production of between 2.8 million and 3.1 million ounces at AISC of between $850 and $925 per ounce.

Production is expected to increase in the third and fourth quarter since the plant at Peñasquito returned to normal operations in July and higher grades are expected from a number of mines, Goldcorp said. AISC are expected to decrease as a result of higher production.

Adjusted operating cash flow was $307 million, compared to $523 million in 2015.

"While lower production was expected in the second quarter, the decision to accelerate a significant organizational restructuring had a short-term, negative impact on gold production,” said David Garofalo, president and chief executive officer. “With the decentralization of our business well under way and new mine management installed at the majority of our operations to reflect the new business model, Goldcorp is poised to deliver better gold production and cost performance.”

The company announced board approval to proceed with the Pyrite leach project at Peñasquito, with an expected capital investment of approximately $420 million, and the materials handling project at Musselwhite, with an expected capital investment of approximately $90 million. Both are expected to increase production beginning in 2019, Goldcorp said.

Source:Kitco

Goldcorp precious metals gold

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

14 hours ago

"Premier Li Qiang Leads State Council Meeting on Enhancing Effective Investment, Boosting Economic Growth"

Premier Li Qiang presided over an executive meeting of the State Council to study policy measures for promoting effective investment. The meeting noted that promoting effective investment plays an important role in stabilizing economic growth and strengthening momentum for development. It is necessary to innovate and improve policy measures, and intensify efforts to enhance the efficiency of utilizing funds such as central budget investments, ultra-long-term special treasury bonds, local government special bonds, and new-type policy-based financial instruments. In conjunction with formulating and implementing the 15th Five-Year Plan

14 hours ago

"Guided by Xi Jinping Thought, Implement 20th CPC Congress Spirit, Apply New Development Philosophy...

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the plenary sessions of the Party’s 20th Central Committee, fully and faithfully apply the new development philosophy, strengthen top-level design, build computing power interconnection nodes oriented toward national hub periods, major strategic regions, and key industries, establish a system of computing power interconnection nodes, improve the efficiency and service level of public computing power resources, and promote high-quality development of computing power.

14 hours ago

Indirect Iran-US Nuclear Talks in Muscat Show Progress, Omani FM Mediates Tense but Efficient Discussions

After intensive indirect consultations, the new round of nuclear talks between Iran and the US in Muscat, the capital of Oman, has achieved phased progress. It is reported that during this round of talks, the Iranian and US delegations did not meet directly. Instead, Omani Foreign Minister Badr acted as an intermediary, conveying a series of core proposals, strategic concerns, and policy positions to the other side. The atmosphere at the talks was tense yet efficient. According to preliminary on-site assessments, although both sides continue to negotiate over specific terms, they have reached a consensus on the key objective of "continuing dialogue."

14 hours ago