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Goldcorp is one of the world's largest gold mining companies employing more than 9,000 people worldwide. Goldcorp has 16 operations and development projects focused throughout the Americas with over 70% of reserves in NAFTA countries.
Goldcorp shares suffer after it slashes 2012 output forecast
Goldcorp reduces production forecast for the year after problems at Red Lake and Mexico mine
Major gold producer Goldcorp (TSE:G) saw its shares sink early Wednesday, a day after lowering its fiscal 2012 production and cash cost forecast, a result of operational problems at two of its biggest mines.
Shares of Goldcorp plummeted 8.8 per cent in Toronto at $34.35 shortly after the opening bell Wednesday.
Gold production at Goldcorp’s top producing Red Lake mine in Ontario was affected in the second quarter by operating delays in the High Grade zone, due to the need for rock de-stressing cuts at the 41 and 45 levels, the company said, as well as by inconsistent mineralization in the Footwall zone.
The company’s open pit mine Peñasquito mine in north central Mexico was also affected by inadequate water supply in June, limiting plant throughput.
Reduced production at Red Lake and Peñasquito resulted in Goldcorp revising its full-year 2012 gold production outlook to a range of 2.35 to 2.45 million ounces, compared to its prior outlook of 2.6 million ounces.
"We are disappointed with reducing production guidance due to operational issues at our two most important mines," said Goldcorp’s president and CEO, Chuck Jeannes.
"Our focus is on addressing these issues promptly and in a manner supporting the long-term opportunities at these key assets."
Goldcorp said the de-stressing cuts at Red Lake are expected to deliver improved operating performance in the High Grade Zone over the second half of 2012, while it is now working on drilling additional wells to increase water production at Peñasquito.
Total cash cost guidance for the year has also been revised higher to $310 to $340 per ounce of gold on a by-product basis, and $625 to $650 per ounce on a co-product basis.
The company previously forecasted a range of $250 to $275 per ounce on a by-product basis, and $550 to $600 per ounce on a co-product basis.
Production of by-product metals for 2012 is estimated at roughly 30 to 31 million ounces of silver, compared to its prior estimate of 34 million ounces.
Zinc production is expected to be in a range of 310 to 325 million pounds, while lead production is anticipated at 155 to 160 million pounds, compared to its previous guidance of 400 million pounds of zinc and 180 million pounds of lead.
Goldcorp’s copper production outlook remains unchanged at 110 million pounds.
The miner reported total gold production for the second quarter to be 578, 600 ounces, a 10 per cent increase from this year’s first quarter.
Total cash costs on a by-product basis for the quarter are expected to be roughly $370 per ounce.
Goldcorp’s second quarter financial results are scheduled to be released prior to the opening bell on July 26.
The Vancouver-based gold producer is focused on the exploration and development of previous metal properties in Canada, the United States, Mexico and Central and South America.
