* Adjusted EPS 54 cents vs avg estimate 46 cents
* Posts record revenue of $1.5 bln on strong gold sales
* Maintains production outlook for 2012
* Shares close up 6.9 percent at C$43.60 on TSX
By Julie Gordon
TORONTO, Oct 25 Goldcorp Inc, the No. 2
Canadian gold miner, reported better-than-expected quarterly
results on Thursday, as improved performance at its Red Lake and
Penasquito mines led to strong gold and silver sales.
The strong quarter, which came just months after the company
was forced to slash its full-year outlook on hiccups at its two
flagship mines, sent shares climbing, with the stock closing up
nearly 7 percent.
"This is the sort of thing the market is looking for -
under-promise, over-deliver and contain your costs - and this is
what Goldcorp has done," said George Topping, a mining analyst
at Stifel Nicolaus in Toronto.
"You put it back-to-back with Agnico-Eagle, which also had a
good quarter, and you get the sense the winds of change have
swept through the gold equities."
Agnico-Eagle Mines Ltd reported record quarterly
production and boosted its outlook for the year after the market
closed on Wednesday. Its shares closed up 8.9 percent at C$55.97
on Thursday on the Toronto Stock Exchange.
Goldcorp maintained its revised production outlook for the
year and said cash costs fell 15 percent in the quarter as
by-product metal credits outweighed higher production costs.
Excluding credits, cash costs rose 20 percent.
As industrywide cost escalation prompts miners around the
world to shelve major growth projects, Goldcorp has undertaken a
review of its capital projects, with a cost update expected
early next year.
"We're not immune to capital escalation - it's been a
problem throughout the industry and we've seen it as well,"
Chief Executive Chuck Jeannes told Reuters.
He added that the company, which earlier this year shelved
its $3.9 billion El Morro project in Chile over a permitting
issue, is not looking at delaying any other projects.
"We've got very high quality mines we're building," Jeannes
said. "I can't imagine deferring any of those."
Shares of the Vancouver-based miner closed up 6.9 percent at
C$43.60 on the Toronto Stock Exchange.
Gold production more than doubled at the Penasquito mine in
Mexico in the quarter, driven by stronger grades. A water
shortage in the arid region is still holding back throughput
rates at the mill, but the company said it was well on track to
meet its forecast.
Goldcorp also saw improved output at its Red Lake mine in
Ontario as it was able to access higher grade zones.
Net earnings in the quarter rose to $498 million, or 61
cents a share, from $336 million, or 42 cents, in the
Excluding foreign exchange gains and other one-time items,
profit fell to 54 cents from 56 cents per share in the third
quarter of 2011. Analysts, on average, expected 46 cents a
share, according to Thomson Reuters I/B/E/S.
Revenue jumped 18 percent to a record $1.5 billion, topping
expectations of $1.4 billion, as the miner sold 617,800 ounces
of gold and 9.1 million ounces of silver.
Goldcorp expects to meet its annual production target of
some 2.35 million to 2.45 million gold ounces at total cash
costs of $310 to $340 per ounce.
Its newest mine, the Pueblo Viejo joint venture with Barrick
Gold Corp, started production in the quarter. The mine
is expected to achieve commercial output in December.
The Vancouver, British Columbia-based company has three new
mines set to start production through 2014: the Cerro Negro
project in Argentina and two new mines in Canada.