* Adj Q4 EPS $0.57 vs Street view $0.54
* Revenue down 5 percent to $1.4 billion
* CEO says growth projects advancing well
By Julie Gordon
TORONTO, Feb 14 Goldcorp Inc, Canada's
second largest gold producer, booked a lower-than-expected drop
in adjusted quarterly profit on Thursday and said improved
peformance at two key mines positioned it for a strong year.
Goldcorp, which in January slashed its 2013 production
forecast and increased development costs at growth projects,
said fourth-quarter output benefited from a strong performance
at its Penasquito gold mine in Mexico and its Red Lake gold mine
in Canada. Both mines had struggled with operational issues
earlier in 2012.
The Vancouver-based miner is pushing ahead with three major
new mines, a different approach to that of its main rival,
Barrick Gold Corp, which on Thursday booked a
multi-billion dollar charge on a growth project and said it has
no immediate plans to build any more mines.
Net earnings were $504 million, or 62 cents a share, in the
quarter ended December 31, below $405 million, or 50 cents a
share, in the year-ago period.
Adjusted to remove one-time items, profit fell to $465
million, or 57 cents a share as costs rose and sales shrank, but
the result was still ahead of the average analyst estimate of 54
cents a share, according to Thomson Reuters I/B/E/S.
Goldcorp is planning some $2.8 billion in capital spending
in 2013, with about 60 percent of that earmarked for development
"The growth projects continue to advance as expected,"
Goldcorp chief executive Chuck Jeannes told Reuters. "And I'm
very excited about the real growth in cash flow and financial
metrics that that will bring us over the coming several years."
The largest investment will be at the Cerro Negro project in
Argentina, where capital costs are up nearly 70 percent from a
previous company estimate.
Jeannes said he is confident in the update to capital costs
the company put out in January, but noted that cost inflation
continues to be a concern in the mining industry.
The cost of building mines has skyrocketed in recent years,
as soaring metal prices prompted miners to rapidly boost output,
leading to a crunch in labor, professional services and building
With capital costs soaring, investors are now demanding
companies return more cash to shareholders instead of wasting
money on bloated construction budgets.
Goldcorp's fourth quarter gold production rose to 700,400
ounces, up from 687,900 ounces. Sales fell to 645,100 ounces,
down from 685,000 ounces, on the timing of shipments, leading to
a 5 percent decline in revenue to $1.4 billion.
Cash costs rose 17 percent to $621 an ounce, while the
realized gold price inched up just 2 percent to $1,692 an ounce.
Goldcorp, which owns mines throughout the Americas, plans to
produce some 2.55 million and 2.80 million ounces in 2013, with
cash costs in the range of $700-$750 per ounce. The company
hopes to boost output by 70 percent over the next five years.