Goldcorp earnings jump as output rises, hikes dividend again

24th February 2011 By: Liezel Hill

TORONTO (miningweekly.com) – Goldcorp, Canada's number-two gold miner, increased fourth-quarter adjusted net earnings by 128% year-on-year, after production and gold prices both rose, and also announced on Thursday it has raised its dividend again, this time by 11%.

Vancouver-based Goldcorp also published updated development studies and announced construction approvals for two Canadian projects, Eleanore in Quebec and the Cochenour project in the company's Red Lake camp, in Ontario.

The miner reported adjusted net earnings of $417,1-million, up from $182,7-million a year earlier. Including one-off items, net income was $331,8-million, compared with $66,7-million in the fourth quarter of 2009.

Revenues rose 70%, to $1,32-billion, boosted by higher gold prices and increased sales volumes. Operating cash flow before working capital changes rose to a record $646,1-million, Goldcorp said.

The company sold 678 600 oz of gold in the fourth quarter, compared with 573 100 oz in the same period of 2009.

Sales volumes were higher because of increased output at the Red Lake and Musselwhite mines in Canada and record production at both Marlin in Guatemala and Los Filos in Mexico, the firm said.

Goldcorp has mines in Canada, Argentina, the US, Mexico, Honduras and Guatemala. The firm also achieved commercial production at its big new Penasquito mine towards the end of 2010, and the operation will become Mexico's biggest gold producer this year.

The newly approved Eleanore and Cochenour projects are both expected to start production in the fourth quarter of 2014, Goldcorp said.

Output at Eleanore is now forecast at an average of 600 000 oz/y, 80% higher than previous estimates, and capital costs have been pegged at $1,4-billion.

Cochenour will add  250 000 to 275 000 oz/y to Goldcorp's production in the Red Lake district, and will cost around $420-million.

DIVIDEND RAISED

Goldcorp said separately it has approved an increase in its annual dividend to $0,40 a common share, citing “increasing cash flows due to growing gold production and a continued strong metals market”.

The company announced just four months ago that it had doubled its annual shareholder dividend payment to $0,36.

A monthly dividend of $0,0333 a common share will now be payable to Goldcorp shareholders of record as of March 17.

Goldcorp produced 2,52-million ounces last year, and said last month it expects production will rise 60% over the next five years.

The company made a series of acquisitions last year, adding the Camino Rojo project in Mexico, a majority stake in the El Morro project in Chile, and, most recently, acquiring Andean Resources to get its hands on the Cerro Negro project in Argentina.

The company also sold some assets in 2010, including the Escobal silver deposit in Guatemala and the San Dimas mine in Mexico.