Goldcorp Inc. (GG) announced that it has suspended mining at its El Sauzal gold mine in Chihuahua, northern Mexico, after it experienced movement in the highwall slope of the Trini pit. A geotechnical survey team will assess the potential impact of the movement on the mine's operation.
The mine is currently in the final year of its active mine life, and is expected to produce about 100,000 to 105,000 ounces of gold in 2014. Roughly 37,000 ounces of gold have been produced from the mine as of Aug 28.
Goldcorp released its second-quarter 2014 results in Jul 2014. The company’s adjusted earnings (excluding one-time items) increased 40% to $164 million or 20 cents per share from $117 million or 14 cents a share earned in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of 14 cents.
Adjusted earnings exclude one-time items including foreign exchange translation gains, shares of net earnings of associates, and loss from the disposal of mining interests. However, earnings include stock-based compensation impact of roughly $16 million or 2 cents per share.
Net earnings, as reported in the quarter, were $181 million or 22 cents per share, in contrast to a net loss of $1,934 million or a loss of $2.38 per share in the year-ago quarter. The company benefited from lower costs in the quarter.
Goldcorp posted revenues (as adjusted) of $1,116 million in the quarter, up 3.8% year over year. It exceeded the Zacks Consensus Estimate of $1,064 million. Average realized gold price for the reported quarter declined 4.6% to $1,296 per ounce from $1,358 per ounce in the prior-year quarter.
Goldcorp has the highest leverage to spot gold prices due to its completely unhedged position. It is progressing well with its development projects and remains on track to attain its long-term production targets.
Some other stocks in the gold mining industry worth a look include Harmony Gold Corporation (HMY), Franco-Nevada Corporation (FNV) and Pretium Resources Inc. (PVG). All of them hold a Zacks Rank #2 (Buy).
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