Goldcorp Meets 2011 Expectations - Analyst Blog
January 11 2012 - 3:15AM
Zacks
Recently, Goldcorp
Inc. (GG) met its 2011 gold production estimation and also
expects to meet success in 2012 and beyond.
With a record gold production of
2.51 million ounces, Goldcorp’s 2011 production costs are estimated
to total approximately $220 per ounce.
Peñasquito mine met its production
target and continued to emerge as an essential asset base in 2011,
with strong operating cash flow in its first year of
production. The company expects production at its Peñasquito
mine in Mexico to rise from the 162,800 ounces in 2010 to 350,000
gold ounces in 2011. The Marlin mine in Guatemala achieved
production of 296,100 ounces of gold last year and is expected to
mine 400,000 ounces this year.
Production at the Los Filos mine in
Guerrero state in Mexico is expected to increase 10% from 306,100
ounces in 2010 to 335,000 ounces.
Gold production from the Pueblo
Viejo joint venture gold project with Barrick in the Dominican
Republic is expected to contribute slightly to Goldcorp's overall
production profile this year with a subsequent ramp up to an
average of 415,000 to 450,000 ounces of gold expected annually in
the first five years of full production.
Goldcorp believes that its forecast
gold production of 2.6 million ounces in 2012 will be driven by
another strong year throughout the portfolio, while increased
production at Peñasquito will be offset by lower production at
Marlin as the mine transitions to 100% underground mining. Besides,
year-over-year growth in the overall production target comes from
new gold production from the Pueblo Viejo joint venture in the
Dominican Republic, but at a significantly reduced level due to
previously reported project delays. Consistent production
levels at other mines throughout the portfolio will create a stable
foundation for the coming years.
Goldcorp has projected a 2011
capital expenditure of $1.8 billion, of which half is allocated to
operations and half is allocated to projects. Of the project
capital expenditure, approximately 30% is budgeted for the
completion of Pueblo Viejo.
Exploration expenditures are
expected to increase to $170 million with the primary focus on the
replacement of mined reserves and on extending existing gold zones
at all of Goldcorp's prospective mines and projects.
Goldcorp has six new mines in the
project pipeline over the next five years and is aiming to increase
gold production by 60% to achieve five million ounces annually
during the period.
Gold production is forecast to grow
approximately 70% over the next five years to 4.2 million ounces in
2016.
The company did not yet disclose
the quantity of silver, copper, lead and zinc byproduct production
for 2010. However, Goldcorp projected a gold equivalent production
of 3.8 million ounces in 2011.
Goldcorp will release its
fourth-quarter 2011 and fiscal year 2011 results on 15th
February 2012.
The company competes with
Barrick Gold Corporation (ABX) and Newmont
Mining Corp. (NEM).
We maintain our Neutral
recommendation on Goldcorp. Currently, it holds a Zacks #2 Rank
(Buy) on the stock.
BARRICK GOLD CP (ABX): Free Stock Analysis Report
GOLDCORP INC (GG): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
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