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Update: How I Feel About Goldcorp Buying Probe Shares From Agnico Eagle
- We have just learned that Goldcorp has entered into an agreement to purchase 7,320,200 common shares of Probe and 2,347,951 warrants to purchase common shares of Probe from Agnico Eagle.
- I published an article detailing what Goldcorp is really up to and went into great detail about this acquisition specifically highlighting that no cash would be spent.
- I like the deal but that said, the decision to buy shares from Agnico goes against what I liked most about the deal.
Is It Time To Return To Investing In Gold? A Look At Goldcorp
- In my view, gold price will rise in 2015, because of global uncertainty and strong demand for gold from Asia and developing economies around the world.
- Technical analysis also suggests that gold is poised to rise.
- Even in the current gold price environment, Goldcorp's strong, investment-grade balance sheet, cost profile and production growth leave it well-positioned for long-term success.
Update: Goldcorp To Acquire Probe Mines' Borden Project
- Goldcorp just announced that it is going to buy Probe Mines.
- It is paying C$5/share, or C$455 million, plus it is spinning out the company's non-core projects.
- While I had anticipated an acquisition, I had thought Goldcorp would buy something that is immediately accretive to production.
- Logistically, the acquisition makes sense given the Borden Project's proximity to Goldcorp's producing Porcupine Project, but the company needs more near-term growth to justify its lofty valuation.
- Investors should continue to anticipate Goldcorp to acquire a producer in the near future.
- Goldcorp has made some big moves of late.
- I will discuss what the company is doing and how I interpret the moves.
- The company is anchoring its portfolio with younger assets.
- The latest acquisition is more than just the Borden Project; no one is talking about this.
- Goldcorp announces today that it agreed to buy a smaller mining company called Probe Mines Ltd., in a friendly, all-stock deal valued at C$526 million ($440 million).
- Goldcorp chose the perfect time, to buy a smaller mining company which will generate long term production growth.
- The tide is slowly changing for the gold miners, and shareholders should welcome this type of project acquisition, that will probably pay off in the near future.
Update: Goldcorp To Buy Probe Mines For C$526 Million
- Goldcorp just announced that it will buy Probe Mines for total consideration of C$526 million.
- Probe's main asset is the 100%-owned Borden Gold Project in Ontario, which is 160 kilometres west of Goldcorp's Porcupine mine. It contains 2 million high-grade gold ounces.
- This transaction looks like a smart move by Goldcorp for a few reasons.
- Goldcorp acquires Probe Mines and its Borden Gold project for around $440 million in an all-stock deal.
- The 49% premium paid was significant, and may be an example for future acquisitions in the gold space.
- The deal allows Goldcorp to improve Borden Gold's economics by processing ore at its nearby Porcupine operations.
- This acquisition confirms our Goldcorp acquisition expectations, and we now think the company is done with its near-term acquisitions, but other companies may be on the prowl.
Goldcorp Could Turn Free Cash Flow Positive In 2015
- Goldcorp reported the sale of its 100% stake in the Wharf gold-silver mine to Coeur Mining for $105 million in cash.
- Goldcorp missed 2014 gold production estimates largely because of troubled gold mines in Mexico.
- Goldcorp could realize an after-tax impairment charge up to $2.7 billion on its Cerro Negro in Argentina.
- Goldcorp expects peak gold production in 2015 as three new gold mines make it into the production pipeline.
- Goldcorp could generate positive 2015 FCF in range of $40 million to $450 million this year based on our estimates.
- Goldcorp’s 2014 output didn’t reach its annual goals.
- For 2015, the company expects higher production but much lower capital expenditure.
- Goldcorp reached a lower-than-expected AISC in 2014 and plans to cut its AISC down again in 2015.
Update: Goldcorp Buries The Lead On A Busy News Day - A Multi-Billion Dollar Writedown
- Goldcorp reported record production as it began producing at two new mines this year -Eleonore and Cerro Negro.
- The company also announced a massive $2.3-$2.7 billion Q4 writedown of the value of Cerro Negro due to trade barriers in Argentina.
- Finally it will be selling its smallest mine - Wharf - to Coeur Mining for $105 million.
- The last two developments are surprising, although the risk of mining in Argentina should dampen investors' surprise.
- I would look elsewhere for gold mining opportunities given the extreme valuation of Goldcorp relative to its production vs. its peers.
Update: Goldcorp Is Looking Back At 2014 And Forward To 2015
- Goldcorp had a decent Q4 and will continue its strong performance in 2015 with an expected 20% production increase.
- This isn't a surprise as both Cerro Negro and Eleonore should contribute quite a few ounces to Goldcorp's production profile.
- My investment thesis will be impacted by Goldcorp's M&A strategy in 2015 as the company has a lot of fire power for acquisitions.
Update: My Reaction To Goldcorp Selling Assets To Raise Cash
- I've just seen the news that Goldcorp announced it will be selling one of its mines.
- I very recently predicted that given the company's cash situation it might need to sell assets or do an equity offering.
- I like the news and think its bullish for a few reasons.
- I cover 2014 production numbers and performance at various holdings.
- I discuss why 2015 will see record production.
- I Discuss the issues related to cash and how the company can overcome them.
- I offer my opinion on why the stock should be accumulated here.
Update: Goldcorp Reports Higher Cash Costs In Q4, But Gives Strong 2015 Guidance
- Goldcorp just reported full-year 2014 gold production of 2.87 million ounces, but all-in sustaining costs were higher than expected at $1,045 per ounce in Q4 2014.
- However, 2015 gold production is forecasted to grow 20% to 3.3-3.6 million gold ounces in 2015; in addition, the company expects all-in costs between $875-$950 per ounce.
- 2015 capital spending is also expected to decrease between $1.2-$1.4 billion.
- I am bullish on shares, and the company's 2015 guidance is better than what I was expecting.
Goldcorp Announces The Sale Of The Wharf Mine And Its Gold Production For 2014 Including 2015 Forecast
- Goldcorp is a mid-tier Canadian gold miner operating a total of 11 mines and four development projects throughout the American continent.
- Goldcorp announces the sale of the Wharf mine in Lead, South Dakota to Coeur Mining and will receive $105 million in cash.
- Goldcorp announced Monday 2014 record gold production of 2.87 M Oz at an AISC of $950/ Oz, and forecast 3.3 to 3.6 M Oz in 2015.
- Goldcorp may be forced to take a non-cash impairment charge of up to $2.7 billion in Q4 2014, for its newly started Argentinian mine (July 2014,) the Cerro Negro.
Update: Despite Cash Flow Issues Goldcorp Announces January Dividends
- Goldcorp has just announced its very first dividend payment of 2015.
- I previously opined the dividend was safe through 2014, but I was not so confident to start 2015.
- The news is bullish and demonstrates management's commitment to the dividend but we have to watch Q4 results closely.
Update: Goldcorp Announces First Monthly Dividend Of 2015
- Goldcorp has announced a $.05 monthly dividend for January of 2015.
- This is positive news as it proves Goldcorp can maintain its dividend, despite weakness in the gold price.
- I remain bullish on shares.
Why Investors Should Consider Capitalizing On Goldcorp's Drop
- Goldcorp shares have dropped 18% in 2014, but given the improvement expected in gold pricing, the company's performance can improve.
- Goldcorp's focus on low-priced assets with reserve growth potential will enable it to improve its margin performance in the future.
- Goldcorp's strong cash flow position will allow it to continue investing in exploration and infrastructure despite a sizable debt.
- Goldcorp’s output will have to pick up to reach its annual goals.
- The changes in its all-in sustaining costs could impact its profitability.
- Falling gold prices will reduce its profit margins in the fourth quarter.
Mon, Jan. 19, 7:57 AM
- Goldcorp (NYSE:GG) has agreed to buy Probe Mines (OTCPK:PROBF) in an all-stock deal that values the metals exploration company at C$526M, in a bid to win control of the Borden Gold project in northern Ontario.
- The deal offers Probe shareholders a 49% premium to the company's Friday closing price of C$3.36/share.
Thu, Jan. 15, 12:35 PM
- Gold, silver, platinum and palladium are spiking today on Switzerland's surprise move to abandon its currency floor, and shares of the miners are following suit: GDX +6.1%.
- "Gold is much stronger as the 'safety' of the Swiss Franc vanishes,” commented Dave Lutz of JonesTrading.
- Peter Boockvar believes that in "a world of currency battles with printing presses that are extraordinarily large... gold will be the last man standing... the gold bear market is over and will go substantially higher from here."
- Against a backdrop of concerns about global growth, deflation and renewed volatility, gold has been climbing since November as other growth-sensitive commodities such as oil and copper have sold off.
- Among precious metals miners: BTG +9.5%, GG +8.9%, KGC +8.7%, NEM +8.3%, AUY +8.1%, EGO +7.4%, [AGI +7%, [ABX]] +6.2%, NG +5.9%, AUQ +5.6%, FNV +5.5%, RGLD +5.4%, IAG +4.8%, GFI +4.2%, HL +4.2%, SLW +3.1%.
- Other ETFs: NUGT, GDXJ, DUST, SIL, JNUG, GLDX, JDST, SLVP, SILJ, RING, SGDM, PLTM, PSAU
Wed, Jan. 14, 6:25 PM
- Goldcorp (NYSE:GG) could soon join a group of large gold miners that have a net loss to show for their entire history as corporate entities, Financial Post's Peter Koven writes.
- GG warned this week that it expects to record a $2.3B-$2.7B impairment charge on its Cerro Negro mine in Argentina; since the miner’s retained earnings were $2.2B as of Sept. 30, they may be completely wiped out in its next quarterly report.
- That's not unusual in the gold industry, where writedowns have destroyed historic profits in recent years: Barrick Gold (NYSE:ABX) has retained earnings of -$7.8B, Kinross Gold (NYSE:KGC) has -$8.5B in historic losses, AngloGold Ashanti (NYSE:AU) has -$4B, and Agnico Eagle Mines (NYSE:AEM) has a mere -$740M.
- The writedowns are non-cash and have no impact on day-to-day operations, but they have damaged the reputations of gold miners and drove away investors who have proven tough to woo back, Koven writes.
Mon, Jan. 12, 6:35 PM
- Coeur Mining (NYSE:CDE) agrees to acquire the Wharf gold mine in South Dakota from Goldcorp (NYSE:GG) for $105M, which CDE says provides quality, immediate growth and adds a stable, established source of production and cash flow to its existing portfolio.
- CDE expects Wharf to produce 85K-90K oz. of gold in 2015 at an all-in sustaining cost of $800-$875/oz. and increase its 2015 EBITDA by more than 30%.
Mon, Jan. 12, 6:22 PM
- Goldcorp (NYSE:GG) says it produced a record 886K oz. of gold during Q4, resulting in FY 2014 gold production of a record 2.87M oz., and sees FY 2015 production increasing ~20% to 3.3M-3.6M oz. of gold, in line with previous guidance.
- The miner says Q4 all-in sustaining costs were $1,045/oz. and $950/oz. for FY 2014, and forecasts 2015 all-in sustaining costs of $875-$950/oz.
- Forecasts 2015 capital spending decreasing to $1.2B-$1.4B.
- Says its Cerro Negro mine in Argentina began commercial production on Jan. 1, but expects to take a Q4 asset impairment charge of $2.3B-$2.7B on the mine due to the government's actions and programs aimed at conserving its foreign exchange reserves and the country's continuing inflation, which are hurting operations at the mine.
- GG -0.4% AH.
Mon, Jan. 12, 2:43 PM
- Goldcorp (GG +3.6%) is the top senior gold producer to own in 2015, analysts at BofA Merrill say, noting the strong Q4 gold production forecast and its expectation of healthy operating guidance for 2015.
- GG had reiterated its 2014 gold output guidance range of 2.95M oz. to 3.1M oz. in the prior quarter with a bias to the lower end, and all-in-sustaining-costs at the lower end of the $950-$1,000/oz. range; the firm also sees cash costs declining 10%-15% over the next several years.
- The company now trades at 1.49x its net asset value, or a ~8% premium to its peer North American gold producers, and the firm feels that delivering on GG’s high-quality growth pipeline would lead to a re-rating for the shares to a 25%-30% premium vs. peers.
Wed, Jan. 7, 11:58 AM
- Goldcorp (GG +0.5%) is likely to disappoint when it reports 2014 production results soon, according to RBC analyst Stephen Walker, whose Q4 projection of 920K oz. would leave the miner below its FY 2014 guidance.
- Q4 production must exceed 970K oz. to hit the low end of its guidance of 2.95M oz., the analyst says while noting some reasons why output could fall short: a slower than expected ramp-up at the Cerro Negro mine, a lower than expected rebound in gold grades at Penasquito, and a slow transition to high-grade zones at Red Lake.
- Nevertheless, Walker would buy shares on any weakness since he believes GG’s outlook for rising production and low costs over the next two years will remain intact; GG expects gold output to rise to as much as 4M oz. in 2016.
Tue, Jan. 6, 3:33 PM
- Gold (NYSEARCA:GLD) extends its recent gains on safe-haven buying, with Comex gold for February delivery gaining 1.3% to a three-week high $1,219.40/oz.
- As investors worry that the slide in oil prices is signaling potential problems with global growth, gold is enjoying a flight to safety which is offsetting the threat of an interest rate hike from the Fed.
- Precious metals miners are enjoying strong gains for the second straight day: GG +7.3%, ABX +2.5%, NEM +3.7%, SLW +3.3%, FNV +1.2%, EGO +3.8%, IAG +7.2%, GFI +4.2%, AUY +10.7%, KGC +11.5%, RGLD +1.7%, AGI +5.3%.
- ETFs: GDX, NUGT, GDXJ, AGQ, DUST, SIL, USLV, JNUG, ZSL, UGL, GLDX, DGP, GLL, UGLD, JDST, DZZ, SLVO, GLDI, DSLV, SLVP, DGL, DBS, SILJ, DGZ, RING, SGDM, DGLD, PSAU, TBAR, USV, UBG, GLDE, BAR, GYEN, GEUR, BARS, GGBP
- Gold (NYSEARCA:GLD) extends its recent gains on safe-haven buying, with Comex gold for February delivery gaining 1.3% to a three-week high $1,219.40/oz.
Tue, Jan. 6, 8:24 AM
Dec. 30, 2014, 4:18 PM
- With the dollar falling against the yen and pound and a minor flight to safety afoot - Treasurys are higher, stocks have closed moderately lower - COMEX gold is up 1.4% today to $1,197/oz., and COMEX silver is up 2.6% to $16.20/oz. The gains have provided a lift to the volatile/beaten-down shares of gold and silver miners.
- Notable gold gainers: IAG +11.7%. ABX +3.6%. AUY +5.2%. NEM +3.6%. GG +4.6%. AU +4.2%. SBGL +4.9%. KGC +4.1%. AGI +5%. AEM +5.1%.
- Notable silver gainers: AG +7.6%. SVM +7.1%. SSRI +6.2%. SVM +6.4%. PAAS +3.9%. SVLC +5.2%. EXK +6.9%.
- ETFs with 3%+ gains: NUGT +10.1%. GDXJ +5.1%. USLV +9.7%. UBG +5.4%. USV +3.8%. SIVR +3.4%. AGQ +6.3%. BAR +3.2%. DBS +3.2%.
- The group rallied on Friday after the PBOC relaxed lending rules for banks, but sold off on Monday.
Dec. 26, 2014, 3:34 PM
- Spurred by hopes China's efforts to relax lending rules are a sign that broader (inflation-boosting) stimulus efforts are on tap, gold and silver prices are rallying, and taking the shares of miners up with them. COMEX gold is up 1.8% to $1,194.50/oz., and COMEX silver is up 2.5% to $16.11/oz. GLD +1.7%. SLV +2.2%.
- Gold stocks: AUY +3%. GG +4.6%. AGI +4.1%. ABX +3.4%. KGC +3.7%. GFI +3.7%.
- Silver stocks: SLW +2.3%. SSRI +6.9%. PAAS +1.9%. AG +3.6%. CDE +4.1%. HL +4.2%. SVM +6.8%. EXK +5.4%. TAHO +5.3%.
- Like many other commodities names, the group was hit hard a month ago when crude prices plunged in response to OPEC's decision to leave oil production unchanged.
- ETFs: AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, OUNZ, DGL, DBS, DGZ, DGLD, AGOL, TBAR, USV, UBG, GLDE, BAR, GYEN, GEUR, BARS, GGBP
Dec. 3, 2014, 4:45 PM
- Goldcorp (NYSE:GG) says it will examine its future investment plans in Guatemala following the country's move to raise mining royalties to 10% from 1%.
- GG, which operates the Marlin mine - Guatemala's largest - says it will need to take a closer look at its future investment in the country as a result of the new measures.
- The Marlin mine is expected to produce up to 185K oz. of gold this year but is nearing the end of its life, so GG says the new measures would have a limited impact on its overall financials.
- Tahoe Resources (NYSE:TAHO) also is seen as threatened by the mining royalty hike.
Dec. 1, 2014, 4:45 PM
- Gold futures surged 3.6% to reclaim the $1,200 level for the first time since late October, sparked in part by the downgrade of Japan’s sovereign debt rating and a retreat in the dollar, as well as India easing its import restrictions and some short covering.
- Gold had sold off initially amid news that Swiss voters rejected a referendum to force the Swiss National Bank to hold 20% of its reserves in gold, slumping to overnight lows near $1,140/oz. before rallying to settle at $1,218.
- As a result, gold miners were among the strongest sectors, with the Market Vectors Gold Miners ETF (NYSEARCA:GDX) finishing 7.7% higher; investors also may have reacted to takeover speculation, as weekend reports said Paramount Gold (NYSEMKT:PZG) was is in talks to be acquired by Coeur Mining (NYSE:CDE).
- Among the top precious metals miners: ABX +4.3%, AEM +6.9%, AU +9.1%, GG +8.2%, GFI +9.2%, SLW +7.2%, NEM +6.8%, AGI +7.7%, IAG +11.3%, AUY +7.4%, KGC +8.5%, NGD +13.7%, GOLD +6.4%, RGLD +7%.
- Other ETFs: NUGT, DUST, SIL, GLDX, SLVP, RING, SGDM, PSAU
Dec. 1, 2014, 12:14 PM
Nov. 28, 2014, 1:21 PM
- Already hit hard over the last two years by declining prices, gold and silver miners saw more pain today as commodity stocks in general got hammered thanks to OPEC's decision not to slash crude production.
- Decliners: ABX -8%. GG -6.1%. AUY -9.8%. KGC -8.2%. GFI -9.9%. SLW -7%. NEM -5.8%. AGI -6.9%. PAAS -9%. AG -15.4%. SSRI -11.6%. CDE -11.4%. HL -8.8%. TAHO -7.8%.
- Previous: Precious metals slide alongside oil; Swiss vote ahead
Nov. 25, 2014, 9:17 AM
- Goldcorp (NYSE:GG) signs a resource development agreement with four First Nation communities in the area of its Porcupine Gold Mines operation in Ontario and establishes a framework for continued consultation on existing and future operations.
- Under the agreement, GG recognizes and respects Aboriginal rights and interests, and the four First Nation communities recognize and support GG’s rights and interests in the operation and future development of the mine.
GG vs. ETF Alternatives
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