Goldcorp Inc.’s GG subsidiary, Minera Penasquito, has reached a definitive court approved settlement with the Cerro Gordo Ejido relating to surface land rights to 600 hectares of land based within the boundaries of the Penasquito mine site.
In 2009, the Cerro Gordo Ejido initiated an action against Penasquito in Mexico's agrarian courts challenging the land use agreement as Mienra Penasquito negotiated an agreement for use of the land before the construction of the mine. However, in 2013, the agrarian courts ruled that the land use agreement was null and ordered the land to be returned to the Cerro Gordo Ejido. Hence, a settlement was reached and Minera Penasquito and the Cerro Gordo Ejido entered into a new 30 year surface land use deal on commercial terms for the 600 hectares.
The Mexican Government, especially the Secretariats of Economy (SE), of the Interior (SEGOB) and Agrarian, Territorial and Urban Development (SEDATU), and the State Government of Zacatecas helped both parties to reach a successful conclusion.
At the Penasquito mine, gold production totaled 141,100 ounces in the fourth quarter of 2014, a decrease of 0.4% year over year and an increase of 9% sequentially. The sequential increase was due to higher ore grades and higher oxide production. The mine is expected to produce between 700,000 and 750,000 ounces of gold in 2015.
Goldcorp’s fourth-quarter 2014 adjusted earnings (excluding one-time items) decreased 25.7% to $55 million or 7 cents per share from $74 million or 9 cents a share earned in the year-ago quarter. Earnings also missed the Zacks Consensus Estimate of 14 cents.
Adjusted earnings exclude one-time items including a hefty impairment charge of $2.3 billion associated with the Cerro Negro mine in Argentina.
Net loss, as reported, for the quarter was $2.4 billion, or $2.94 per share compared with a net loss of $1.1 billion, or $1.34 per share in the fourth quarter of 2013. The higher net loss mainly resulted from the sizable impairment charge.
Goldcorp posted revenues (as adjusted) of $1,087 million in the quarter, down 9.6% year over year. Revenues also missed the Zacks Consensus Estimate of $1,115 million. Average realized gold price for the reported quarter declined 4.1% to $1,203 per ounce from $1,254 per ounce in the prior-year quarter.
Goldcorp, one of the leading gold mining companies along with Barrick Gold ABX, Newmont NEM and Kinross Gold KGC, expects gold production in 2015 to increase about 20% to between 3.3 and 3.6 million ounces.
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