Goldcorp Posts Q1 Gold Production - Analyst Blog

Gold mining giant Goldcorp Inc. GG is hosting its annual Investor Day today. The company also declared its first-quarter 2014 gold production, preliminary all-in sustaining costs and revised gold production outlook for 2014.

Goldcorp, at the meet, will also highlight details of the projects and operating mines that are expected to drive high-quality, low-cost production growth over the next several years.

Gold production for the first quarter totaled 680,000 ounces and the all-in sustaining costs for the same period are expected to be roughly $875 per ounce. However, the final calculation of capital and operating costs has not been completed yet.

Goldcorp also revised its gold production outlook for 2014 and expects it to lie between 2.95 million ounces and 3.1 million ounces. It anticipates all-in sustaining costs to remain within the range of $950 and $1,000 per ounce of gold. The revision in the 2014 outlook was due to the sale of the Marigold joint venture.

Goldcorp closed the sale of its 66.7% interest in the Marigold mine in Nevada to Silver Standard Resources Inc. SSRI on April 4, 2014. Marigold was jointly owned by Goldcorp and Barrick Gold Corp. ABX, where the latter held a 33.3% stake. A total consideration of $275 million was paid to these parties at the close of this transaction.

Goldcorp and Barrick announced in Feb 2014 that they will sell their respective stakes in the Marigold mine. The proceeds to Barrick have been adjusted to reflect Goldcorp's position as the manager and majority owner of the joint venture.

Goldcorp's divestment of its interest in the Marigold mine is in line with its strategy of focusing on core assets, thereby creating value for shareholders. On the other hand, Barrick sold its respective stake as part of its ongoing effort to shed some higher-cost assets, thereby reducing its debt burden. This acquisition will help Silver Standard to add an operating mine in a well-established and low-risk mining jurisdiction.

Goldcorp, which currently carries a Zacks Rank #3 (Hold), will release its full first-quarter 2014 results on May 1.

A better-ranked stock in the gold mining industry is AngloGold Ashanti Ltd. AU, carrying a Zacks Rank #1 (Strong Buy).