Goldcorp’s stumble: How an industry leader blew it – by Niall McGee (Globe and Mail – January 12, 2019)

Peter Jacobs liked what he heard when he attended Goldcorp Inc.’s investment day in January of last year. So the chief investment strategist with Stifel RMG Group, a Washington-based financial firm, started buying shares.

Goldcorp management’s presentation made a strong case that the mining company “was on track to increase production and reserves, lower costs, deleverage the balance sheet and create additional shareholder value,” he said.

A year later, the picture isn’t so pretty. In late October, Goldcorp lost close to a fifth of its market value in a single day after reporting falling production, rising costs and a decline in reserves. Gold grades at its flagship Cerro Negro mine in Argentina fell by more than 30 per cent in the third quarter compared with the previous quarter.

Production at its Musselwhite mine in Ontario and giant Pueblo Viejo operation in Dominican Republic, which it owns alongside Barrick Gold Corp., also fell more than expected. The company reduced its production forecast and bumped up its cost expectations for 2018.

Goldcorp shares have been in a long-term tailspin, trading at $12.86 apiece Friday on the Toronto Stock Exchange, down from more than $54 in 2011. Sources say the company is exploring options for a possible combination with another gold miner in a bid to revive its fortunes.

“I don’t know about how other shareholders feel but I would think and hope they are also disgusted by the lack of execution against goals laid out” last year, Mr. Jacobs said. “The company has failed on all fronts.”

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