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TORONTO – Gold miners promised investors they would cut operating costs, and recent earnings reports show they are doing just that. First quarter earnings from Goldcorp Inc., Agnico-Eagle Mines Ltd., New Gold Inc. and Barrick Gold Corp. demonstrate they are all making significant improvements on the cost front. And while there are further reductions to be made, investors and analysts have been pleased with what they’ve seen so far.
This earnings season is an instructive one for the gold sector, because the first quarter of 2013 was the last one before gold prices plummeted and companies began a frantic process of yanking costs out of their business. By comparing this year’s results to last year’s, investors get a good sense of how aggressively miners have acted.
On Thursday, mining giant Goldcorp Inc. reported all-in sustaining costs of US$840 an ounce for the first quarter. The result beat its own forecast and is a significant decline from US$1,134 an ounce in the same quarter a year ago (though that was an unusually bad result for the company).
“Goldcorp’s solid first quarter results underscore what we expect to be recurring themes in 2014: High quality production growth, excellent cost performance and strong progress toward completion of our three current growth projects [Cerro Negro, Eleonore and Cochenour],” chief executive Chuck Jeannes said on a conference call.
New Gold said its all-in sustaining costs dropped by US$330 year-over-year to US$674 an ounce, while Barrick’s costs were down US$100 to US$833. Agnico Eagle did not break out its quarterly all-in sustaining costs, but said it expects costs for the full year to be below prior guidance of US$990. Eldorado Gold Corp.’s Q1 costs were just US$786.
For the rest of this article, click here: http://business.financialpost.com/2014/05/01/goldcorp-posts-us98-million-first-quarter-profit-but-revenue-slips-from-year-ago/