Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Miners inside the Eureka vein at Cerro Negro gold and silver mine in Argentina’s Santa Cruz province. (Image courtesy of Goldcorp via Flickr)
Canada’s Goldcorp (TSE:G), (NYSE:GG), the world’s biggest bullion producer by market value, logged Thursday first-quarter earnings that missed analysts’ estimates, amid a drop in the precious metal prices.
The Vancouver-based miner’s net loss was $87 million, or 11 cents a share, compared with net income of $98 million, or 12 cents, in the same period last year. The drop reflects a lower realized margin on gold sales, a higher tax rate, and higher depreciation and depletion expenses, the company said.
However, Goldcorp maintained its production and cost guidance for the year and said output should increase over the course of 2015, as it is ramping up production at its Peñasquito, Cerro Negro and Eleonore operations.
Stock plummets
The company came under heavy selling on the lower than expected results. In heavy volume the world’s most valuable gold stock was trading down 6.55% at $18.84 on the New York Stock Exchange and it had dropped almost 6% in Toronto, to $22.78 at 10:42 am ET.
Goldcorp’s results follow a series of recent and disappointing earnings by major gold producers, such as Barrick Gold (TSE, NYSE:ABX) and Yamana Gold (TSE:YRI).
