Goldcorp today reported a growth in 4Q17 net earnings, to US$242 million, up from US$101 million in 4Q16. The operating cash flow in relation to the same period the previous year improved from US$239 million to US$511 million in 4Q17. The company’s full-year financial and operational highlights yielded FY17 net earnings of US$658 million at US$0.76 per share compared to US$162 million at US$0.19 per share in FY16.
The significant financial improvement is mainly due to the sale of the Los Filos mine in Guerrero, the Camino Rojo project and the 21 percent interest in the San Nicolas copper-zinc project, both in Zacatecas. The company also divested the Cerro Blanco project in Guatemala. This was part of Goldcorp’s 20/20/20 strategy to drive shareholder value by increasing production by 20 percent, reducing AISC by 20 percent and growing reserves by 20 percent.
Yearly gold production exceeded the company’s guidance of 2.5 million ounces to reach 2.6 million ounces. For 4Q17 gold production was 640,000 ounces at AISC of US$870/oz, compared to 761,000 ounces at US$747/oz in 4Q16.
Los Filos was sold to Leagold Mining Corporation for US$350 million (before working capital adjustments); Cerro Blanco to Bluestone Resources for US$22 million; San Nicolas to Teck Resources Limited for US$50 million and Camino Rojo to Orla Mining for US$34 million in Orla common shares and a 2 percent net return on royalty revenues from metal production.
The projected expansions of Peñasquito, Musselwhite and Porcupine operations underpin Goldcorp’s 20/20/20 growth plan. Peñasquito’s 4Q17 production was driven by a higher grade and is now transitioning to a lower grade zone until 2019. But according to David Garofalo, President and CEO of Goldcorp, the operator’s other assets compensate for this. “The planned decreasing grade for Peñasquito is more than offset by the continuous growth in production of Cerro Negro, Éléonore and a better fourth quarter for Red Lake, Musselwhite and Pueblo Viejo,” he says.