) second-quarter 2014 adjusted earnings (excluding one-time items)
increased 40% to $164 million or 20 cents per share from $117
million or 14 cents a share earned in the year-ago quarter.
Earnings per share topped the Zacks Consensus Estimate of 14
Adjusted earnings exclude one-time items including foreign
exchange translation gains, shares of net earnings of associates,
and loss from the disposal of mining interests. However, earnings
include stock-based compensation impact of roughly $16 million or 2
cents per share.
Net earnings, as reported in the quarter, were $181 million or
22 cents per share, in contrast to a net loss of $1,934 million or
a loss of $2.38 per share in the year ago quarter. The company
benefited from lower costs in the quarter.
Goldcorp posted revenues (as adjusted) of $1,116 million in the
quarter, up 3.8% year over year. It exceeded the Zacks Consensus
Estimate of $1,064 million. Average realized gold price for the
reported quarter declined 4.6% to $1,296 per ounce from $1,358 per
ounce in the prior-year quarter.
Gold sales increased 2.4% year over year to 639,500 ounces in
the reported quarter while production increased 0.4% to 648,700
Silver production rose 25.1% year over year to 9 million ounces
from 7.2 million ounces in the prior-year quarter. All-in
sustaining costs were $852 per ounce (down 30.6% year over year),
while cash cost totaled $470 per ounce on a by-product basis and
$643 per ounce on a co-product basis, both falling year over
At the Penasquito mine, gold production totaled 167,400 ounces,
an increase of 90% year over year. All-in sustaining cost was a
record low at $362 per ounce due to the continued success of the
'Operating for Excellence' program and higher by-product credits.
Initial permits for the Northern Well Field at the Penasquito mine
were sanctioned with constructions expected to be complete by
mid-2015. Also the concentrate enrichment process project and the
pyrite leach project are expected to be completed in late 2014 and
early 2015, respectively.
Gold production at Los Filos dropped 41.7% year over year to
48,700 ounces at an all-in sustaining cost of $1,077 per ounce.
Operations at the Los Filos mine were suspended for 43 days before
resuming. A new five-year land occupancy agreement was inked on May
5, 2014, following the negotiation with the Carrizalillo Ejido.
Gold production at Red Lake decreased 26.9% year over year to
89,500 ounces at an all-in sustaining cost of $1,066 per ounce.
Gold production was negatively impacted by a decrease in mill
throughput. Due to de-stress activities, lower stopes were
available in the High Grade Zone. Production is expected to rise in
the second half of 2014.
At Porcupine in Ontario, gold production in the quarter was
68,800 ounces, down 1.4% year over year at an all-in sustaining
cost of $895 per ounce.
At Pueblo Viejo, where Goldcorp holds a 40% interest and Barrick
Gold Corp. (
) holds 60%, gold production increased 32% year over year to
107,100 ounces (40% basis) at an all-in sustaining cost of $618 per
As of Jun 30, 2014, cash and cash equivalents were $1,220
million, up 35.7% from $899 million as of Jun 30, 2013. Long-term
debt stood at $2,471 million as of Jun 30, 2014, up 8% from $2,287
million as of Jun 30, 2013. The company's adjusted operating cash
flow was $376 million in the quarter compared with $388 million in
the year-ago quarter. Dividends of $122 million were paid in the
In Mar 2014, the company sold its interest in the Primero mine
for $201 million. In Apr 2014, Goldcorp also sold its interest in
Marigold mine in Nevada.
The first gold pour at the Cerro Negro project was announced on
Jul 25, 2014.
The Eleonore gold project in Quebec remains on track for first
gold production in late 2014 and for commercial production in the
first quarter of 2015.
At the Cochenour project, the haulage drift connecting the Bruce
Channel deposit to the Red Lake complex was 96% complete. The
project remains on track for its first production in the third
quarter of 2015.
At the Camino Rojo project near Penasquito in Mexico, favorable
exploration and concept study results demonstrate that it will
become Goldcorp's next major growth project.
Mine development is in progress for the underground deposits of
Eureka and Mariana Central. Production commenced at Eureka, while
production at Mariana Central is forecast to commence in the second
half of 2014.
Goldcorp reiterated its production guidance for 2014 in the
range of 2.95 million and 3.10 million ounces. It now expects
all-in sustaining costs to be at the bottom end of its guidance of
$950 to $1,000 per gold ounce, reflecting the lower-than-expected
costs in first-half 2014. The company also narrowed its capital
spending guidance to a range of $2.3 billion to $2.4 billion for
2014 from $2.3 billion to $2.5 billion guided previously.
Goldcorp currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the gold mining industry include
AngloGold Ashanti Ltd. (
) and Sibanye Gold Ltd (
), both carrying a Zacks Rank #1 (Strong Buy).
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