Goldcorp Inc, Canada's No 2 gold miner, notched an 84 percent jump in first-quarter profit, benefiting from soaring gold prices and the sale of its stake in Silver Wheaton, the company said on Monday.
Goldcorp, which has operations in Canada and throughout Latin America, sold its 48 percent stake in Silver Wheaton for about $1.6 billion during the quarter, which added $136.5 million to the bottom line. Net profit was $229.5 million, or 32 cents a share, up from a year-before profit of $124.9 million, or 18 cents a share. Stripping out the Silver Wheaton gain, a non-cash foreign exchange loss, and an unrealised copper derivatives loss, the company earned 23 cents a share, just ahead of the 21 cents a share profit expected by analysts.
"Goldcorp's Latin American assets were our strongest performers, against a backdrop of record high realised gold prices in the first quarter," Goldcorp Chief Executive Kevin McArthur said in a statement. Better than expected results from the Marlin mine in Guatemala and the Los Filos mine in Mexico helped offset what the company termed a "slow start to the year" at its Canadian operations.
At the company's Red Lake mine in Northwestern Ontario, mine sequencing issues and operational problems cut 30,200 ounces from production while the Musselwhite mine, also in Ontario, was shut for 18 days due to failures in the underground crusher and conveyor system.
Vancouver-based Goldcorp said it expects higher production from its Canadian assets quarter-over-quarter through the year. All told, gold sales in the latest quarter were 517,800 ounces, down from 527,000 ounces in the year-before period.
PRICES DRIVE REVENUE However, with realised gold prices climbing 43 percent to $932 an ounce, revenue climbed 32 percent to $626.7 million. The company's shares, which have risen about 32 percent over the past year amid soaring bullion prices, were up 44 Canadian cents at C$37.25 on the Toronto Stock Exchange.
"Overall, the results were in line with expectations, or slightly ahead," said John Ing, president of Maison Placements in Toronto. Cash costs per ounce were $240, up from $181, including the offsetting impact of copper and silver sales. The higher cost was due to the stronger Canadian dollar, and higher labour and consumables costs.
On a co-product basis, costs were $396 per ounce. Goldcorp reaffirmed its 2008 outlook for production of about 2.6 million ounces at a cash cost of about $250 an ounce. It forecast capital spending, excluding its 40 percent owned Pueblo Viejo project in the Dominican Republic, at about $1.2 billion for the year.
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