Goldcorp Inc. (TSX:G) had a third-quarter loss of US$44 million, the miner announced October 30.
This is a significant drop compared with the US$5 million profit reported in the same period last year. The company said the decrease is due in large part to a US$36 million reduction in the anticipated recoveries from low-grade stockpiles at its Penasquito mine in Mexico. This write-down, Goldcorp said, resulted in a US$0.04 loss per share.
Revenue fell 6% to US$1.088 billion for the quarter from US$1.16 billion in Q3 2013.
Year-to-date, revenue is down 2% compared with last year, to US$2.66 billion. However, the company had net earnings of US$252 million in the nine months to September 30, compared with a net loss of US$1.62 billion last year. That loss was driven by a US$2.56 billion impairment of mining interests and goodwill.
CEO Chuck Jeannes said on a conference call with investors that gold production was lower than expected during the third quarter.
“However, the gold didn’t go anywhere. The production is delayed rather than lost,” he said, adding he expects production to ramp up in the next quarter.
CFO Lindsay Hall told investors the drop in earnings was primarily attributable to lower realized prices and a higher tax rate in the third quarter.
But Jeannes said he expects prices to go up in the next fiscal year due to lower supplies of gold.
In a release, Jeannes said two new mine projects – one in Argentina and one in Quebec – are advancing as anticipated.
“The continued ramp-up of new mines Cerro Negro and Éléonore, coupled with stable performance at our existing mines position us for a strong finish to 2014,” Jeannes said.
“We expect to meet our 2014 production guidance, but the lower-than-expected production at El Sauzal due to pit wall instability and the second-quarter stoppage at Los Filos will cause gold production to be at the low end of our previously guided range of between 2.95 million and 3.1 million ounces.”
As of press time, shares of Goldcorp were trading at $21.70, which represents a drop of 9.83%. The price went as low as $21.47 after the results were announced, which is lower than the company’s previous 52-week low of $21.87.
