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- 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.
Goldcorp: A Gold Producer For A Potential Gold Rebound
- Goldcorp is a mid-tier Canadian gold miner operating a total of 12 mines and four development projects throughout the American continent.
- The company is well-managed and will post an AISC under $1,000/oz in 2014.
- GG offers a 3.2% per annum dividend and presents a good growth prospect for 2015, with two new mines: Éléonore and Cerro Negro.
- Goldcorp's production issues will weigh on its financial performance.
- However, Goldcorp is bringing new mines online in order to mitigate some of the impact.
- Goldcorp's debt is a concern.
- Goldcorp generates strong free cash flow, which might improve further as gold pricing improves.
- Goldcorp is expected to deliver bottom-line growth in the next half decade as compared to a loss in the last five years.
Update: Goldcorp Announces December Dividends--A Holiday Surprise
- Goldcorp announced its December dividend of $0.05.
- I predicted the dividend would be maintained despite the high cash burn rate in Q3.
- I remain resolute in my call to own some gold exposure at these levels and think Goldcorp is still best-in-breed.
Update: Goldcorp Signs An Agreement With 4 First Nations Communities In Timmins, Ontario
- Goldcorp has signed an agreement with four first nations communities in Timmins, Ontario with respect to its Porcupine Project.
- I had not anticipated this in my previous articles.
- This is an bullish development for an important yet less well-known of Goldcorp's Projects, although I continue to avoid the stock at current valuations.
Update: Goldcorp Signs Agreement With The First Nations - Reducing Political Risk Goes A Long Way
- Goldcorp announced that its Porcupine Gold Mines had signed a Resource Development Agreement with four First Nation communities in Canada.
- I previously wrote about the political risk of being a miner but did not see this agreement coming despite years of negotiations.
- Reducing political risk is bullish and in this case means that the Porcupine Mines can continue its long running production history without worry from the First Nations.
- Goldcorp's Chuck Jeannes speaks with Henry Bonner at Sprott Global and hints that the company is looking for acquisitions.
- Investors interested in the gold mining space will find that Goldcorp is overvalued, but that there are opportunities among potential acquisition targets.
- I name 4 that Goldcorp may be interested in and that investors may want to consider as well.
- Goldcorp recently withdrew its environmental impact study for El Morro copper-gold project in Chile.
- Goldcorp has good growth coming from Cerro Negro and Éléonore, and near-term gold production from Cochenour.
- Camino Rojo is advancing to the pre-feasibility stage, and that should be complete early 2016.
Update: Goldcorp Announces Dividend - The Significance To Shareholders
- Goldcorp has just announced its latest dividend of $0.05, in-line with its prior payout.
- As I predicted the dividend was maintained despite the serious cash burn in Q3.
- The commitment to the dividend is significant for shareholders who have suffered over the last few years and I maintain that we should do some buying as others panic.
Update: Goldcorp Withdraws Its Environmental Impact Study For El Morro
- Goldcorp just announced that it has withdrawn its EIS for El Morro as the company was not able to get government approval with the current plan.
- This should come as no surprise and I expressed concerns over this project in my recent article.
- Goldcorp has no near-term growth projects after Eleonore and Cerro Negro reach full production and shares remain overvalued.
Goldcorp Sinks To 6-Year Lows; Buying Opportunity On Tax Loss Selling
- Impairment charges at its Peñasquito and El Sauzal Mexican gold mines negatively affected earnings growth.
- Cerro Negro and Éléonore will play a big role in helping Goldcorp achieve its fourth quarter, and full-year production forecast.
- Tax loss related selling in December could provide an ample buying opportunity for those who want to own a gold, dividend paying stock.
What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition
- Goldcorp’s costs on both a core and a core non-tax basis rose significantly on a year-over year basis.
- This rise was due to increasing costs and lower gold-equivalent production due to operating issues at some of the company's mines.
- We expect production to rise again in upcoming quarters and capital spending to decrease into 2015.
- For gold investors, the fact that costs are well above the current gold price suggest that the current gold price is too low to be sustainable in the long-term.
- Goldcorp’s output slightly increased despite the lower-than-expected production at El Sauzal.
- Higher all-in sustaining cost slashed its profitability.
- The company will have to show a sharp rise in production to reach its annual production guidance.
- Goldcorp missed production and earnings estimates in Q3.
- Goldcorp has over 54 million ounces of gold reserves and over 800 million ounces of silver reserves.
- The stock appears expensive when compared to other big cap gold stocks based on its gold and silver reserves.
Alan Greenspan Is Bullish On Gold - Could Goldcorp Be The Opportunity?
- Greenspan argues gold is a good investment with QE coming to an end.
- Goldcorp shares tank after Q3 earnings disappointment.
- My assumptions in the Levered Returns valuation models yield a fair value per share of $22, 20% above GG’s October 31st closing price of $18.61.
- Goldcorp reports weak results and is free cash flow negative.
- This is a negative surprise as I was aiming for the company to be FCF positive this year.
- 2014 will be a ‘lost year’ for Goldcorp, but fortunately the capex will start to decrease from next year on.
Update: Goldcorp Drops 10% On Weak Q3 Earnings, But Shares Are Way Oversold
- Goldcorp has reported poor Q3 earnings with higher than expected cash costs.
- The company lost $.05 per share or $44 million, with all-in costs coming in at $1,066 an ounce.
- Still, the company reported adjusted net earnings of $70 million and operating cash flows of $192 million.
- With a 10% drop in share price, I think the market has overreacted as results weren't nearly that bad.
- Goldcorp (GG) just reported its third quarter results which missed estimates on earnings but saw revenues climb year-over-year.
- I discuss the production results and costs.
- What is going on with cash?
- Is the dividend secure?
Fri, Nov. 28, 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
Tue, Nov. 18, 3:59 PM
- Gold prices jumped 1.2% to settle just shy of $1,200/oz. as the dollar eased against major currencies amid tensions in eastern Europe and the Middle East, and some observers are starting to ask if gold mining and production stocks (GDX +4.8%) have finally found a bottom.
- 24/7's Chris Lange thinks gold giants may have hit their lows on Nov. 5, followed by an impressive recovery since that date with gold fundamentals apparently not changing drastically.
- Major precious metals miners are strong across the board: ABX +6.5%, AEM +4.4%, AU +6.2%, GG +3.7%, GFI +7.6%, SLW +3.6%, NEM +3.4%, AGI +4.9%, IAG +6.6%, AUY +6.8%, KGC +9.2%, NGD +2.8%, GOLD +1.9%, RGLD +3.7%.
- Other ETFs: GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, SILJ, RING, SGDM, PSAU
Fri, Nov. 14, 10:58 AM
- The gold market will enter deficit by 2016 as producers cut capex, resulting in reduced supply in the medium- to long-term, Credit Suisse analyst Anita Soni writes, seeing 2014 as a likely plateau for supply (Briefing.com).
- Agnico Eagle Mines (AEM +2.6%) and Eldorado Gold (EGO +4.5%) are the firm's top picks among gold miners under coverage.
- Other Outperform rated gold companies are GG, KGC, AUY, AUQ, FNV, GSS and IAG; rated Neutral are ABX, NEM, NGD and AGI.
Fri, Nov. 7, 2:49 PM
- Goldcorp (GG +5.5%) says it has withdrawn the environmental impact study for its El Morro gold and copper mine in Chile after the country's Supreme Court halted development last month.
- GG says a project team has begun new studies to determine an optimal development plan for the $3.9B project that meets the company's investment return criteria.
- As of Dec. 31, El Morro on a 70% basis contains proven and probable gold reserves of 6.73M oz. and proven and probable copper reserves of 4.89B lbs.
Fri, Oct. 31, 11:35 AM
- Precious metals miners are slammed for a third straight session as gold prices plunged to multiyear lows.
- Japan’s surprise stimulus move is supporting the U.S. dollar and driving the ICE U.S. Dollar index to a four-year high, making gold more expensive to overseas buyers; while the prospect for more monetary stimulus usually increases the lure of gold, the threat of global deflation has withered gold’s appeal as a hedge against rising prices, Barron's Chris Dieterich explains.
- Nearly everyone in the sector is hitting 52-week lows (again): ABX -4.5%, NEM -7.7%, GG -0.5%, SLW -3.6%, AGI -5.8%, AEM -4.1%, AUY -10.6%, IAG -4.6%, KGC -16.2%, NGD -6.1%, AU -2%, GOLD -1.6%.
- Also: GFI -7.4%, RGLD -3.8%.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, RING, SGDM, PSAU
Thu, Oct. 30, 9:17 AM
- Goldcorp (NYSE:GG) -1.7% premarket after reporting Q3 earnings and revenues that fell well short of analyst estimates as costs rose.
- Q3 gold production rose 2% Y/Y to 651.7K oz., but average all-in sustaining cost was $1,066/oz., compared with $995/oz. a year ago and much higher than analysts expected.
- GG says it reduced the carrying value of a low-grade ore stockpile at its Penasquito mine in Mexico, which raised average costs by $64/oz. and negatively affected adjusted earnings by $0.04/share.
- Expects FY 2014 gold output will be at the low end of its forecast range of 2.95M-3.1M oz., citing pit wall instability at El Sauzal and the suspension of activities at Los Filos in Q2; expects all-in sustaining costs at the low end of its guidance range of $950-$1,000/oz.
- Full-year capital spending guidance remains unchanged at $2.3B-$2.4B.
Thu, Oct. 9, 3:58 PM
- The price of gold may be rising, but gold mining stocks are getting hammered today; after all, "they are still stocks," Barron's Johanna Bennett writes.
- Gold prices rallied today to $1,234/oz., their highest level since Sept. 23, a day after the dovish minutes from the Fed’s September policy meeting excited gold bugs, but shares of the mining companies are falling along with the broader market selloff.
- Among the top mining names: IAG -6.9%, KGC -6.2%, SLW -5.9%, NGD -5.5%, AU -4.9%, GG -4.7%, ABX -3.9%, AUY -3.9%, GFI -2.8%, BTG -2.7%, RGLD -2.6%, AGI -2.1%, GOLD -1.8%.
- ETFs: GLD, SLV, GDX, GDXJ, NUGT, AGQ, IAU, DUST, SIL, USLV, SIVR, JNUG, SGOL, ZSL, UGL, GLDX, DGP, GLL, UGLD, DZZ, JDST, SLVO, GLDI, DSLV, SLVP, DGL, DBS, SILJ, DGZ, RING, OUNZ, GGGG, DGLD, AGOL, SGDM, PSAU
Thu, Oct. 9, 10:35 AM
- Goldcorp (GG -2.4%) is looking to cut costs on its planned and already-delayed $3.9B El Morro copper and gold project in Chile, and that may mean new permits are needed and further hold-ups, CEO Chuck Jeannes says.
- The project has been caught up in a legal fight, and this week Chile's Supreme Court ruled El Morro's environmental permit should be suspended until the company holds new talks with local indigenous groups.
- While progress on the project has been bogged down, the CEO says GG has been reviewing engineering plans to find a better way to build the mine and is continuing those studies.
Mon, Oct. 6, 2:45 PM
- Gold prices bounce off 15-month lows to reclaim $1,200/oz. as the dollar rally pauses, helping strengthen shares of precious metals miners: AU +4.4%, GFI +3%, IAG +1.9%, BTG +3%, GG +2.2%, NGD +1.5%, KGC +1.6%, AGI +1.6%, RGLD +1%, SLW +2.1%.
- Sterne Agee analysts Michael Dudas and Satyadeep Jain foresee gold and silver prices trending higher, with gold averaging $1,400/oz. in 2015 and $1,450 in 2016 and silver averaging $19 next year and $21 in 2016, as “global demand remains firm, liquidity remains ample and the dollar appears overbought.”
- With investor sentiment still skeptical, Sterne thinks any supportive macro news flow could provide fuel for a rally; the firm rate Newmont Mining (NEM +1.5%), Agnico-Eagle Mines (AEM +2.4%), Coeur Mining (CDE +1.3%) and Gold Resource (GORO +0.2%) as Buys, with Barrick Gold (ABX +0.5%), Hecla Mining (HL +4.3%) and Pan American Silver (PAAS +1.5%) rated Neutral.
- ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, DGL, DBS, DGZ, OUNZ, DGLD, AGOL, DBP, TBAR, USV, UBG, JJP, GLDE, BAR, GYEN, GEUR, RGRP, BARS, GGBP, BLNG
Mon, Sep. 8, 11:49 AM
- Miners have reached "peak gold," in which gold production has hit its high as easy-to-mine gold deposits become harder to find, Goldcorp (GG -2.4%) CEO Chuck Jeannes tells WSJ.
- Jeannes says a falloff in supply will support the gold price but make mining it even harder and lead to further consolidation in the industry; yet investors are wrong to believe GG is poised to make acquisitions of its own, he says.
- Gold production has been on the upswing since the late 1970s, hitting 2,270 metric tons last year, but Jeannes believes that without a dramatic technological advance gold production is unlikely to increase during his career.
- ETFs: GDX, NUGT, DUST, GLDX, RING, GGGG, SGDM, PSAU
Thu, Sep. 4, 2:58 PM
- Goldcorp's (GG -2.8%) gold production this year could end up near the bottom end of its forecast range if it is unable to restart output at one of its Mexican mines, CEO Chuck Jeannes says.
- GG said yesterday it suspended mining at its El Sauzal mine in Mexico as a safety precaution after instability in the pit wall, and Jeannes says it could be weeks or months before mining could resume there; in a worst case scenario, the company would not restart the operation, which is in its last year of active mine life.
- GG had expected to produce 2.95M-3.1M oz. of gold this year, up from 2.67M oz. last year, but the CEO says the combination of the El Sauzal problem and the Los Filos shutdown earlier in the year would push output toward the bottom end of guidance for 2014.
Fri, Aug. 1, 10:32 AM
- Goldcorp (GG +1.8%) shares were swept away by yesterday's market carnage and didn't reflect the miner's strong Q2 earnings report, but they're moving higher today in recognition of continuing solid performance even as rivals grab the headlines.
- GG said yesterday it is positioned for a prolonged period of production growth as three significant construction projects would be completed by 2015.
- Continuing cost improvements - most notably at the giant Penasquito mine in Mexico - are a particular source of pride for CEO Chuck Jeannes, who is also happy with cost reductions at GG’s older mines, which needed to get leaner in order to stay competitive in a low gold price environment.
- All-in sustaining costs averaged $846/oz. in H1, far below full-year guidance of $950-$1,000, but the company maintains that guidance, as it expects sustaining capital spending to be much higher in H2; Jeannes saysit will take time for investors to get used to the fact that all-in numbers will fluctuate as opposed to steadier operating costs.
- Raymond James upgrades shares to Outperform from Market Perform with a $33 price target, raised from $31.
Mon, Jul. 14, 11:29 AM
- Precious metals miners are broadly lower as gold futures head for their biggest daily drop of 2014, plunging $29.30, or 2.2%, to $1,308.10/oz.
- Physical demand has remained short of expectations, Commerzbank's Eugen Weinberg says, and India's decision to maintain a 10% import duty on gold and silver likely will dampen future gold demand expectations from the country.
- Barclays, which expects gold to drop to $1,200/oz. by Q3, also expresses caution, saying recent gains across the metals complex look toppy.
- ABX -1.2%, NEM -1.7%, GG -2.4%, KGC -1.8%, AEM -1.4%, AUY -1.4%, EGO -3%, NGD -2.8%, FNV -2.4%, AGI -2.6%, AU -2.2%, IAG -1.9%, GFI -3.4%, BTG -2.1%, NG -0.7%, SLW -2.1%.
- ETFs: GLD, SLV, GDX, NUGT, AGQ, IAU, DUST, SIL, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLDX, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, SLVP, DGL, DBS, GLTR, DGZ, RING, AGOL, DGLD, OUNZ, DBP, GGGG, WITE, PSAU, TBAR, USV, UBG, JJP, GLDE, GYEN, GLDL, RGRP, GLDS, GEUR, GGBP, BLNG
Thu, Jul. 10, 5:36 PM
Thu, Jun. 19, 3:35 PM
- Beaten-up gold miner stocks are strong across the board as precious metal prices move sharply higher and take out key technical resistance levels; Comex gold jumped $41.40 (+3.3%) to settle at $1,314.10/oz., the highest level since April 14, and silver added $0.87 (+4.4%) to end at $20.65/oz..
- Among today's winners: EGO +8.5%, AGI +8.5%, BTG +8.1%, SBGL +8.1%, SLW +5.5%, AUY +5.3%, AUY +5.2%, KGC +5.2%, GG +4.8%, NG +4.4%, AU +4.1%, ANV +4%, GFI +3.8%, ABX +3.2%, NEM +2.8%, IAG +1.7%.
Tue, May. 27, 3:33 PM
- June gold fell to its lowest level in 15 weeks, settling 2% lower $1,265.50/oz., as "everywhere the investor looks, he sees nothing but a negative for gold today." Silver slipped 1.8% to end at $19.07/oz.
- Gold's drop despite increased violence in eastern Ukraine "is a telling sign that more weakness may be on the horizon," says Forex.com's Matt Weller; a shift in tone by Russia, which indicated its willingness to work with the new Ukrainian government and made strides toward a natural gas deal between the two countries, removed another support from the gold market.
- Also a factor is a round of stronger U.S. economic data showing a surprise increase in durable goods orders, improved housing data and rising consumer confidence, which is providing a lift to stocks; the expiration of June gold options also is adding to market volatility.
- Precious metals miners are among the day's weakest stock performers: ABX -3.4%, GG -3.8%, NEM -3.1%, SLW -3.4%, KGC -3.8%, AUY -4.1%, AU -6.5%.
- ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, ZSL, SGOL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, DGL, DBS, DGZ, DGLD, AGOL, OUNZ, TBAR, USV, UBG, GLDE, GYEN, GEUR, GLDS, GLDL, GGBP
GG vs. ETF Alternatives
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