Production shortfall lowers Goldcorp earnings

Three disadvantages combined to dampen second-quarter earnings for Goldcorp (TSE): a drop in gold production; a lower realized gold price; and higher operating costs at the Wharf mine in South Dakota.

The company posted earnings of $600,000, or 2 cents a share, on revenue of $26.8 million, compared with $22.4 million, or 69 cents a share, on $37.6 million for the same period last year.

Gold sales during the second quarter amounted to 36,238 oz. at US$386 per oz., compared with 52,981 oz. at US$402 in the year-ago period.

For the six months ended June 30, Goldcorp earned $2.7 million, or 9 cents a share, on revenue of $62 million. This compares with $24.1 million, or 95 cents a share, on $67.4 million for the first half of 1994.

Gold sales for the 6-month period were moderately lower, dropping to 89,467 oz. at US$378 per oz., compared with 95,512 oz. at US$401 in the same period of 1994.

Consolidated gold production from the Red Lake, Wharf and Golden Reward mines was 27% lower in the second quarter of 1995 than in the comparable period of 1994. Total production was 37,351 oz., down from 51,631 oz. produced in the second quarter of last year.

Output at the Red Lake mine has fallen as a result of an ongoing, $10-million exploration and development program. Nevertheless, the mine recorded an operating profit of $500,000 for the first six months of the year.