) fourth-quarter 2013 adjusted earnings (barring one-time items)
of 9 cents a share missed the Zacks Consensus Estimate of 23
cents, and were well below 57 cents a share in the year-ago
quarter. The company's share price, however, increased 3.7%
during the trading session following the announcement on its
positive outlook for 2014. Goldcorp expects a 13%-18% increase in
gold production in 2014.
Adjusted earnings exclude the impacts of non-cash foreign
exchange loss on translation of deferred income tax assets and
liabilities, a non-cash deferred tax impact of Mexican,
Argentinean and Guatemalan tax changes, net impairment charges,
loss on disposition related to some of its equity investment,
unrealized losses for sale securities, and a non-cash provision
related to the increase in estimates on the reclamation and
closure costs for the company's inactive and closed mine sites.
However, earnings include stock-based compensation impact.
Net loss, as reported, in the quarter was $1.1 billion or
$1.34 per share compared with net earnings of $504 million or 47
cents per share.
For full year, adjusted earnings were 78 cents per share, down
61.5% year over year and missed the Zacks Consensus Estimate of
92 cents. On a reported basis, net loss was $3.34 per share
compared with earnings of $1.95 in 2012.
Goldcorp posted revenues (as adjusted) of $1,203 million in
the quarter, down 16.2% year over year. It missed the Zacks
Consensus Estimate of $1,242 million. Average realized gold price
for the reported quarter declined 25.9% to $1,254 per ounce from
$1,692 per ounce in the prior-year quarter.
Gold sales increased 12.5% year over year to 725,700 ounces in
the reported quarter and production increased 9.8% to a record
768,900 ounces. Silver production rose 36.5% year over year to
9.8 million ounces from 7.2 million ounces in the prior-year
quarter. All-in sustaining costs were $810 per ounce, while cash
cost totaled $467 per ounce on a by-product basis and $645 per
ounce on a co-product basis.
For full year, adjusted revenues were $4.7 billion, beating
the Zacks Consensus Estimate of $4.2 billion.
At the Penasquito mine, gold production totaled 141,700
ounces, an increase of 25.5% year over year and 24% sequentially.
All-in sustaining cost amounted to $473 per ounce. The
sequential increase in production was due to higher ore grades,
consistent with mining in the deeper portion of the pit, and
improved metallurgical recoveries.
Gold production at Los Filos edged up 1.3% year over year and
28% sequentially to 94,000 ounces at an all-in sustaining cost of
$860 per ounce. The sequential increase in gold production
was due to an increase in tonnage processed as third quarter
production was hurt by the record floods, and higher grades from
the processing of superior underground material.
Gold production at Red Lake increased 32% sequentially to
128,000 ounces at an all-in sustaining cost of $822 per ounce due
to higher grades, partly offset by 7% lower mill throughput.
At Porcupine in Ontario, increased grades from the VAZ zone in
Hoyle Pond and bulk zones in the Dome underground led to gold
production of 78,900 ounces at an all-in sustaining cost of $907
per ounce in the reported quarter.
At Pueblo Viejo, where Goldcorp holds a 40% interest and
Barrick Gold Corp.
) holds 60%, gold production increased 139.5% year over year
and 39% sequentially to 104,700 ounces (40% basis) at an
all-in sustaining cost of $688 per ounce. Sequentially,
production increased due to an increase in tons milled during the
quarter following the completion of the autoclave modifications
during the fourth quarter.
As of Dec 31, 2013, cash and cash equivalents were $625
million, down 17.4% from $757 million as of Dec 31, 2012.
Long-term debt stood at $1,482 million as of Dec 31, 2013,
compared with $783 million as of Dec 31, 2012. The company's
adjusted operating cash flow was $439 million in the reported
In Jan 2014, Goldcorp announced that it has commenced its
offer to acquire all of the outstanding common shares of Osisko
Mining Corporation. As per the offer, Goldcorp will provide
Osisko shareholders 0.146 of Goldcorp common share and C$2.26 in
cash for each Osisko common share. Goldcorp announced its plans
to acquire all of the outstanding common shares of Osisko for
about C$2.6 billion ($2.4 billion) in cash and shares.
Earlier this month, Goldcorp announced that the company along
with its joint venture partner Barrick will sell their respective
stakes in Marigold mine in Humboldt County, Nev. to
Silver Standard Resources Inc.
) for $275 million in cash. The transaction is expected to close
in Apr 2014. The completion of the transaction is subject to
customary closing conditions, including regulatory approvals.
The first gold production at the Cerro Negro project is
expected by mid-2014 with commercial production expected in the
fourth quarter of 2014. The company expects gold production
in the range of 130,000-180,000 ounces for 2014.
At the Cochenour project, the first gold production is
expected in the fourth quarter of 2014 with minimal ounces
expected for the year. Once the project is fully ramped-up
to full production, annual gold production is expected in the
range of 225,000 and 250,000 ounces.
At the Eleonore project in Quebec, stope development commenced
on levels 440m, 410m and 380m to allow production drilling in the
first quarter of 2014. The initial capital forecast remains
unchanged at $1.8 and $1.9 billion. Goldcorp expects gold
production in 2014 to be in the band of 40,000 to 60,000
ounces. Average annual gold production, once the mine
reaches full production, is expected to be about 600,000
For 2014, Goldcorp expects a 13%-18% increase in gold
production to a range of 3-3.15 million ounces. All-in
sustaining costs are expected to reduce to between $950 and
$1,000 per ounce of gold. The company will revise both gold
production and cash cost guidance following the expected closing
of the Marigold divestiture in Apr 2014.
Capital expenditures for 2014 are anticipated between $2.3
billion and $2.5 billion, of which roughly 60% is allocated to
growth projects and 40% for sustaining capital at existing
Goldcorp currently carries a Zacks Rank #3 (Hold).
Another company in the gold mining industry worth considering
) which carries a Zacks Rank #1(Strong Buy).
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