VANCOUVER (miningweekly.com) – Canadian gold major Goldcorp has beaten average analyst forecasts for its first-quarter earnings as the company’s sustainable efficiency programme gains traction.

The Vancouver-based miner on Wednesday reported net earnings for the three months ended March 31, of $170-million, or $0.20 a share, compared with net earnings of $80-million, or $0.10 per share, for the comparable quarter of 2016.

The increase was mainly attributable to higher realised metal prices, lower depreciation and depletion because of lower sales volumes, lower corporate administration and restructuring costs, as well as a $33-million reduction in a provision to fund the company’s 37.5% share of Alumbrera’s reclamation costs, which was partially offset by lower sales volumes.

Adjusted for various non-cash items, earnings were $0.10 a share, beating average analysts forecast calling for earnings of $0.08 a share.

Revenues fell 7% to $882-million, mainly owing to an 18% drop in gold sales and 11% fewer silver ounces sold, which was partially offset by 21% higher zinc sales volumes and 3% higher realised gold, 14% higher silver and 66% higher zinc prices.

The lower gold and silver sales volumes were mainly the result of lower output at Red Lake on the back of lower grade and lower ore tonnes mined and milled, Los Filos, owing to a focus on higher grade and lower strip ratio material, and Cerro Negro, due to the inclusion of ore from stockpiles in 2016 production and lower mine production.

The lower output at those sites was offset partially by higher output at Peñasquito, owing to higher ore grade as a result of mine sequencing and higher mill throughput.

Gold production fell 16% year-over-year to 655 000 oz, with all-in sustaining costs (AISC) of $800/oz being 4% lower over the comparable year-earlier period.

"Strong first quarter results were driven by solid production and low all-in sustaining costs, with our $250-million annual sustainable efficiency programme well advanced and already benefitting the bottom line," stated president and CEO David Garofalo.

Goldcorp’s cornerstone producing mining properties comprises the Éléonore, Musselwhite, Porcupine and Red Lake mines, in Canada; the Peñasquito mine, in Mexico; the Cerro Negro mine, in Argentina; and the Pueblo Viejo mine (40% interest), in the Dominican Republic.

The company has outlined its 20/20/20 growth plan that is expected to deliver a 20% increase in gold output, a 20% increase in gold reserves and a 20% reduction in AISC over the next five years.

"To deliver on the 20/20/20 growth plan we are maintaining a laser focus on execution, while simultaneously optimising our asset portfolio and driving down costs. In addition, we continue to enhance the strongest growth pipeline in the gold industry with the planned 60-million-ounce joint venture in the Maricunga District, in Chile, financed by the sale of non-core assets. This transaction underlies our strategy of growing net asset value per share by delivering three- to four-million ounces of sustainable, annual gold production from six to eight core camps,” Garofalo said.

In pursuit of growing its net asset value per share, Goldcorp reaffirmed its 2017 guidance to produce 2.5-million ounces of gold at AISC of $850/oz.

Capital expenditures are expected to top $600-million, with the majority of the spending on Peñasquito's pyrite leach project, Musselwhite's materials handling project, and the Borden, Coffee, Cochenour and NuevaUnión growth projects.