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Goldcorp Reports Sharp Rise In 4Q Net Profit

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Goldcorp Reports Sharp Rise In 4Q Net Profit

(Kitco News) - Goldcorp Inc. (TSX: G, NYSE: GG) late Wednesday reported that earnings in the fourth quarter more than doubled from the same period a year ago.

The gold producer listed a net profit of $242 million, or 28 cents per share, up from $101 million, or 12 cents, in the fourth quarter of 2016.

The company said the increased profit was primarily due to higher earnings from Cerro Negro due to increased gold production, an increase in the average realized gold price to $1,285 an ounce from $1,178 a year ago, increased zinc revenues at Peñasquito due to both higher production and zinc prices, a gain on the sale of the company's interest in the San Nicolas project, and the impacts of the sale of Los Filos and closure of Marlin in the second quarter. Goldcorp also cited an increase in income-tax recovery compared to the same period a year ago, largely due to impairments recognized in 2017 and the impact of Argentine tax reform.

These increases were partially offset by the impacts of an impairment expense at Red Lake and lower gold revenues at Peñasquito due to less production as a result of planned lower grades, the company said.

Goldcorp listed October-December production of 646,000 gold ounces at all-in sustaining costs $870 per ounce, compared to 761,000 ounces at AISC of $747 per ounce in the same period a year ago. Silver output fell to 7.1 million ounces from 7.4 million, while copper output also fell but lead output rose.

For full-year 2017, output of 2.6 million gold ounces exceeded the midpoint of the company's guidance of 2.5 million gold ounces, while AISC of $824 per ounce were in line with midpoint guidance of $825 per ounce. The company said the latter was due to its “sustainable efficiency” program.

A program to implement $250 million of “sustainable annual efficiencies” by the middle of 2018 is on track, with nearly $200 million achieved in 2017, Goldcorp said.

“More than 100% of the $250 million of efficiencies have been identified, with the program likely to be extended and the efficiency target increased, after the company achieves its current target,” Goldcorp said.

For full-year 2017, Goldcorp reported net earnings were $658 million, or 76 cents, per share, compared to $162 million, or 19 cents, for 2016.

Meanwhile, Goldcorp reported a 26% increase in proven and probable gold mineral reserves to 53.5 million ounces, plus expansions at Peñasquito, Musselwhite and Porcupine (Borden), underpin its plan for a 20% increase in gold production, a 20% increase in gold reserves and a 20% reduction in AISC by 2021. The company said it expects production to top 3 million ounces by 2021, with AISC falling to around $700 an ounce.

The company also launched a “Beyond 20/20” effort, investing in its long-term portfolio, including the Century, NuevaUnión and Norte Abierto projects, aimed at growing low-cost gold production from mineral reserves.

Goldcorp maintained previous 2018 guidance of 2.5 million gold ounces.

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