GOLD NEWS
In Q3, Goldcorp reported net earnings of $5m compared to net earnings of $498 million in the third quarter of 2012.
Author: Dorothy Kosich
Posted:
Friday
,
25 Oct 2013
RENO (MINEWEB) -
Goldcorp is deferring some capital spending at the Cerro Negro project in Argentina, suspending all exploration activity, and increasing the proposed capex budget from $1.35 billion to a range of $1.6 billion to $1.8 billion.
“…Factors in Argentina, including permitting delays, an unsustainable foreign exchange rate and uncertainty with respect to provincial taxation demands continue to present significant challenges to our project,” said Goldcorp in financials released Thursday. “In response, we have suspended exploration and deferred certain development activities at Cerro Negro, and we are revising our guidance for first gold production and capital costs.”
During a conference call with analysts Thursday, Goldcorp Executive Vice President Russell Ball told analysts, “Consequently and in order to be disciplined with our capital we have temporarily suspended development at Mariana Norte [vein at Cerro Negro].”
CEO Chuck Jeannes told analysts that Cerro Negro’s first gold production in expected in mid-year 2014 with 2014 production anticipated to be in the range of 130,000 to 180,000 ounces, down substantially from the previous estimate of 400,000 ounces.
Goldcorp also anticipates lower gold production at the Pueblo Viejo Joint Venture with Barrick, which has prompted the company to tighten its 2013 production guidance from the previous range of 2.55 million to 2.8 million ounces to a new range of 2.6 million to 2.7 million ounces.
Goldcorp’s gold production in the third quarter of the year was 637,100 ounces, up from 592,500 ounces in the third quarter of 2012. Silver production declined from 8,509,300 ounces in the third-quarter 2012 to 7,744,600 ounces.
FINANCIALS
Goldcorp reported a net loss of $1.62 billion or $2 per share for the first nine months of 2013, compared to net earnings of $1.245 billion or $1.54 per share for first nine months of last year. Adjusted net earnings amounted to $560 million or 69-cents per share for the first nine months of the year, compared with adjusted net earnings of $1.177 billion or $1.45 per share for the same period of 2012.
The net loss attributable to Goldcorp for the first nine months in this year was impacted by a 21% decrease in revenues, a 9% increase in production costs, and an impairment of mining interests of goodwill of $2.558 billion among other expenses. In the second quarter of this year, Goldcorp took a non-cash charge of $1.96 billion after tax on Penasquito and the pending Mexican tax increase.
During Thursday’s conference call, Jeannes said the proposed tax royalty legislation in Mexico is “significantly higher than what had been discussed over the last years. …What it does, as I said, is it changes that hurdle rate for new investments and it will likely drive our capital elsewhere. If we don’t get the returns we are looking for in Mexico, we’ll put it somewhere else.”
For the third quarter of this year, Goldcorp reported net earnings of $5 million or 1-cent per share compared to net earnings of $498 million in the third quarter of 2012. Adjusted net earnings in the third quarter of this year totaled $190 million or 23-cents per share, compared to $441 million or 54-cents per share in the third quarter of last year.
Ball told analysts that third quarter results “were impacted negatively by the cumulative tax adjustments arising from the amendments for the Pueblo Viejo Special Lease Agreement or SLA which was ratified just prior to the close of the quarter. “ The cumulative negative impact amounted to $187 million, he noted.