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(Reuters) - Goldcorp Inc (G.TO), the No. 2 Canadian gold miner, reported a 48 percent increase in quarterly profit on Thursday, as improved performance at its Red Lake and Penasquito mines led to strong gold and silver sales.
On an adjusted basis, profit slipped but still handily beat analysts' expectations, sending shares up more than 3 percent shortly after market opened.
Goldcorp maintained its production outlook for the year and said it will update capital spending expectations early next year in light of industrywide capital cost escalation.
Escalating costs have pushed mining companies around the globe to shelve major development projects as investors demand more measured growth and better return on investment.
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.
Shares rose 3.6 percent to C$42.25 shortly after the Toronto Stock Exchange opened.
Net earnings in the quarter rose to $498 million, or 61 cents a share, from $336 million, or 42 cents, in the year-earlier period.
Excluding foreign exchange gains and other one-time items, profit fell to 54 cents a share from 56 cents a 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.
The company 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 (ABX.TO), started production in the quarter. The mine is expected to achieve commercial output in December.
The Vancouver-based company has three new mines set to start production through 2014: the Cerro Negro project in Argentina and two new mines in Canada.
Reporting by Julie Gordon; Editing by Gerald E. McCormick and Jeffrey Benkoe