Goldcorp Inc.’s (GG) fourth-quarter 2012
adjusted earnings (excluding one-time items other than stock-based
compensation expenses) of 42 cents a share missed the Zacks
Consensus Estimate of 54 cents and were well below 66 cents a share
earned in the year-ago quarter. Earnings, as reported, were 47
cents per share compared with 39 cents in the year-ago quarter.
For full-year 2012, earnings (excluding one-time items other
than stock-based compensation expenses) were $1.82 per share, below
the Zacks Consensus Estimate of $1.94. Reported earnings were $1.95
per share, down from $2.18 posted a year ago.
Revenues decreased 5.3% year over year to $1.43 billion in the
quarter, missing the Zacks Consensus Estimate of $1.63 billion. For
the full year, sales increased 1.4% to $5.43 billion, also missing
the Zacks Consensus Estimate of $5.89 billion.
Gold sales fell 5.8% year over year to 645,100 ounces in the
reported quarter and production inched up 1.8% to 700,400 ounces.
Total cash costs were $360 per ounce of gold on a by-product basis
and $621 per ounce on a co-product basis.
Goldcorp is adopting an all-in sustaining cash cost measure this
year, which include by-product cash costs, sustaining capital,
corporate general and administrative expenses, exploration expense
and reclamation cost accretion.
Mining Highlights
At the Red Lake Mine in Canada, gold production went up almost
9.3% year over year to 168,300 ounces in the quarter. Total cash
cost was $403 per ounce, a year-over-year jump of almost 7.8%.
At Porcupine in Ontario, gold production decreased 0.8% to
74,100 ounces with total cash cost coming in at $750 per ounce.
Gold production at Musselwhite climbed 12.7% to 64,000 ounces at
a total cash cost of $693 per ounce.
At the Penasquito mine, gold production surged 37.2% to 112,900
ounces. Strong by-product silver, lead and zinc credits led to
total cash cost of negative $457 per ounce of gold on a by-product
basis. Silver production at the mine was about 5.2 million compared
with 5.9 million in the year-ago quarter.
At the Los Filos mine, gold production increased 8.9% to 92,800
ounces at a total cash cost of $572 per ounce.
At Marlin, gold production declined 62.1% from the year-ago
quarter to 49,500 ounces at a cash cost of negative $182 per ounce
on a by-product basis. Silver production declined 36.9% to 1.8
million ounces.
At Alumbrera, gold and copper production totaled 31,800 ounces
and 25.4 million pounds, respectively, a year-over-year increase of
38.3% and 37.3%, respectively. Total cash cost was negative $894
per ounce on a by-product basis.
At Pueblo Viejo, where Goldcorp holds a 40% interest with the
rest owned by Barrick Gold Corporation (ABX), gold
production was 43,700 ounce in the quarter. Pueblo Viejo achieved
commercial production in Jan 2013 and ramp up to full capacity is
expected in the second half of 2013.
Financial Position
As of Dec 31, 2012, cash and cash equivalents were $918 million
versus $1,502 million as of Dec 31 2011. The company’s operating
cash flow before working capital changes amounted to $2.4 billion
in 2012.
Project Update
Goldcorp is conducting several studies related to a number of
its growth projects. A study of the Cochenour project was completed
in the fourth quarter of 2012, which concluded that the Bruce
Channel ore body is lower than previously expected, necessitating
the deepening of the Cochenour shaft by 245 meters, resulting in
deferral of first gold production to the first half of 2015.
Cerro Negro is advancing on schedule toward first gold production
at the end of 2013.
Eleonore in Quebec continues to benefit from a development plan
focused on capital efficiency and building a solid production
platform beyond expected first production in late 2014.
Outlook
For 2013, Goldcorp expects gold production to between 2.55 and
2.80 million ounces and total cash costs are projected between $525
and $575 per ounce of gold on a by-product basis and in the range
of $700 to $750 per ounce of gold on a co-product basis. All-in
cash costs are expected between $1,000 and $1,100 per ounce.
Capital expenditures for 2013 are anticipated at roughly $2.8
billion, of which, around 60% is allocated to projects and 40% for
operations.
Currently, Goldcorp retains Zacks Rank #5 (Strong Sell).
Other companies in the gold mining industry having favorable
Zacks Rank are AngloGold Ashanti Ltd. (AU),
Banro Corporation (BAA). Both hold a Zacks Rank #2
(Buy).
BARRICK GOLD CP (ABX): Free Stock Analysis Report
ANGLOGOLD LTD (AU): Free Stock Analysis Report
BANRO CORP (BAA): Free Stock Analysis Report
GOLDCORP INC (GG): Free Stock Analysis Report
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