Credit: Shutterstock photoGold mining giant Goldcorp Inc. ( GG ) has achieved its gold production guidance for 2013 with a record production of 767,700 ounces in the fourth quarter, bringing the total gold production for the year to 2.67 million ounces, an 11% rise over 2012. The 2013 gold production was expected to be between 2.6 million and 2.7 million ounces.
Goldcorp's shares rose around 3.3% in the trading session following the news announcement. The company's shares eventually closed at $22.41, gaining around 1.3%.
Goldcorp expects all-in sustaining costs for the fourth quarter to be roughly $885 per ounce of gold. It also expects the 2013 all-in sustaining costs to be around $1,065 per ounce of gold which is within the expected guidance of $1,050 and $1,100 per ounce. Total cash costs are projected to be roughly $560 per ounce of gold on a by-product basis and around $710 per ounce of gold on a co-product basis in 2013.
Gold production for Penasquito and Los Filos mines in Mexico are 404,000 and 332,000 ounces of gold, respectively, for 2013. Red Lake, Porcupine and Musselwhite mines in Canada produced 493,000, 292,000 and 255,000 ounces of gold, respectively for the same year. Pueblo Viejo (40% interest) mine in Central America and Marlin mine in Guatemala produced 324,000 and 202,000 ounces of gold in 2013.
All the Goldcorp-operated mines either met or exceeded the 2013 production guidance except for the Los Filos mine, where production was halted temporarily last summer due to record floods.
For 2014, Goldcorp expects gold production to rise around 13-18% to between 3 and 3.15 million ounces of gold. The company further estimates gold production for Penasquito and Los Filos mines to be within the range of 530,000 to 560,000 ounces and 330,000 to 345,000 ounces, respectively, in 2014.
Goldcorp also expects gold production for 2014 in Red Lake, Porcupine and Musselwhite mines to range between 440,000 and 480,000 ounces, 290,000 and 305,000 ounces, and 230,000 and 240,000 ounces, respectively. For the Pueblo Viejo mine and Marlin mine, Goldcorp expects gold production for 2014 to be within the range of 405,000 to 420,000 ounces and 175,000 to 185,000 ounces, respectively.
Goldcorp estimates all-in sustaining costs to decrease to a range of $950 and $1,000 per ounce in 2014, compared to around $1,065 per ounce in 2013. The decline in costs may result from increasing grades and by-product production at Penasquito, lower costs at Pueblo Viejo, low-cost production from Cerro Negro and attaining cost efficiencies through the Operating for Excellence program.
For 2014, Goldcorp forecasts capital expenditures to be between $2.3 billion and $2.5 billion, of which roughly 60% is allocated to projects and 40% to operations. Exploration expenditures are expected to total roughly $190 million in 2014.
First-time gold productions are expected out of new projects including Cerro Negro to start its operations by mid-year 2014, Eleonore to start its operations by fourth-quarter 2014 and Cochenour to start its operations by fourth-quarter 2014. Significant contributions from these new projects are expected to drive five-year gold production growth.
Goldcorp, which currently carries a Zacks Rank #3 (Hold), expects to release its fourth-quarter 2013 results on Feb 13.
Other companies in the gold mining industry worth considering are B2Gold Corp. ( BTG ), Timmins Gold Corp. ( TGD ) and Franco-Nevada Corp. ( FNV ). All of them carry a Zacks Rank #2 (Buy).
B2GOLD CORP (BTG): Get Free Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
