BY LINDSAY BRISCOE
Goldcorp top executives say “operational discipline” and “cost containment” are what’s keeping the company on track as it heads toward the end of one of the most volatile metals market years in recent history.
“Most of our mines saw meaningful reductions in costs compared to the previous quarter,” said Goldcorp Chief Executive Officer and President Chuck Jeannes, in a conference call last week. “The operating teams at each mine have continued to implement innovative ways of adding value consistent with our Operating for Excellence program, and as additional initiatives take hold we look forward to a positive impact on our financial results.”
Goldcorp Chief Operating Officer and Vice President, George Burns describes the company’s Operating for Excellence program as its “vehicle to becoming best-in-class.”
“Each of our mines is in a different phase. Some are very mature and others are brand new. What we’re trying to develop is a culture, throughout the Company, that allows good ideas to bubble up from the workforce,” Burns said in a Q&A available on the company’s website. “We have enough capacity that we can incubate and fertilize good ideas and execute on the best opportunities to improve our business. Leading companies find ways to create change and to create opportunities to improve the business, and that is what we intend to do.”
An Oct. 17 Bloomberg report, based on “the most accurate forecasters,” says gold price will drop each quarter in 2014 to reach a four-year low and average of $1,175 an ounce. Analysts say the drop in price will coincide with a trim down of stimulus by the Federal Reserve as the American economy recovers.
As of last week, gold was 32 per cent below its record price of $1,921.15 in September 2011.
Local Projects in Q3
Gold production at Red Lake dropped from 122,500 to 97,000 ounces from Q2 to Q3. The company attributes the decline to the mining of lower grade blocks in the 41 and 45 levels and the start of planned de-stress work on the 47-46 level.
A number of drills continue to work on the NXT zone in Red Lake. Results indicate it remains open vertically and to the west.
Red Lake is on track to meet gold production levels of between 475,000 and 510,000 ounces for 2013.
Progress on the haulage drift at Cochenour has slowed due to poor ground conditions related to a talc zone but the project is now 80 per cent complete. Two drills continue to work in the drift to test the underexplored area.
The first drill platform to access the Bruce Channel deposit is being excavated and drilling commenced in the fourth quarter.
Jeannes called development at Cochenour “especially impressive.” First gold is still expected for the first half of 2015.
Q3 Financial Highlights, 2013
– Adjusted revenues totaled $1.2 billion.
– Gold sales totaled 652,100 ounceson gold production of 637,100 ounces.
– All-in sustaining costs totaled $992 per ounce; cash costs totaled $551 per ounce on a by-product basis and $706 per ounce on a co-product basis.
– Adjusted net earnings were $190 million, or $0.23 per share.
Q2 Financial Highlights, 2013
– Revenues totaled $889 million.
– Gold sales totaled 624,300 ounces on gold production of 646,000 ounces.
– All-in sustaining costs totaled $1,279 per ounce, cash costs totaled $646 per ounce on a by-product basis and $713 per ounce on a co-product basis.
– Adjusted net earnings were $117 million, or $0.14 per share.