Montreal—(Kitco News) Goldcorp’s second-quarter gold production rose 4.7 percent and sales increased 5.9 percent creating a record operating cash flow of 382.6 million as a result of higher gold prices, the Vancouver-based company said Thursday.

“Our strong financial results in the second quarter demonstrate Goldcorp’s continued progression toward a period of sustained cash flow expansion,” said Chuck Jeannes, President and CEO, through the company’s earnings report released Wednesday.

Revenues rose 34 percent to $844.3 million during 2010’s second quarter compared to the second quarter of 2009’s results of $628.6 million. In the second quarter of 2010 Goldcorp produced 609,500 ounces compared to 582,400 ounces in the second quarter of 2009 and gold sold in the second quarter of 2010 rose to 598,000 from 564,800 ounces in the second quarter of 2009.

“We saw growth in all key financial metrics as increased gold sales and higher realized gold prices generated higher revenues, record cash flow and higher net earnings,” Jeannes said.

Total cash costs per ounce on a by-product basis for the quarter were $363. An ounce of gold was sold for an average $1208 leading to a margin of $845 per ounce of gold during the second quarter.

“It’s interesting to note that our second quarter cash margin of $845 per ounce of gold is the level at which gold itself was trading at just 18 months ago,” Jeannes said.

Cash costs on a by-product basis were $38 per ounce higher compared to the first quarter results of $325 due to higher operating costs at the Alumbrera mine, which included export retention taxes paid. Had operating costs been avoided at Alumbrera, cash cost quarter over quarter would have shown a decrease, said Lindsay Hall, Goldcorp CFO.

The Alumbrera mine, located in Argentina, produced 34,400 ounces of gold in the second quarter compared to 2009’s quarterly results of 46,900 ounces; however, the total cash cost per ounce on a by-product basis dropped significantly in 2010. In the second quarter of 2009, the cash cost was $559 per ounce while in 2010 it fell to $102 per ounce.

Other mines that contributed significantly were the Red Lake mine, located in Ontario, Canada, and the Marlin mine, located approximately 300km northwest of Guatemala City, Guatemala. Red Lake gold mines in the second quarter produced 159,000 gold ounces compared to 125,700 ounces in the second quarter of 2009, increasing gold production by 26 percent. Total cash cost was also lowered by $18 from a year-on-year basis. Marlin mine produced 71,500 gold ounces in the second quarter compared to 63,000 ounces in 2009’s second quarter. Cash cost per ounce dropped from $250 in 2009 to $48 in 2010.

Goldcorp expects continued production increases during the third and fourth quarters, forecasting a total of 2.55 million ounces of gold at total cash costs of approximately $350 per ounce. The sale of the San Dimas mine to Mala Noche Resources Corporation, expected in the coming days, will inject $450 million in cash proceeds into Goldcorp’s second half forecast, Hall said.

By Alex Létourneau of Kitco News aletourneau@kitco.com

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook