Goldcorp earnings up on Red Lake production

Goldcorp (G-T) has announced improved third-quarter earnings on higher production and improved gold prices.

For the three months ended Sept. 30, the company earned US$10.6 million (or 13 per fully diluted share) on revenue of US$34.6 million, a nice turn-around from a year-ago loss of US$200,000 on US$17 million.

For the first nine months of the year, the company’s earnings tally to US$40.6 million (48 per share) on revenue of US$126.7 million, compared with a loss of US$5.8 million (7 per share) on US$35.6 million the previous year.

Third-quarter gold production amounted to 134,907 oz. at a cash cost of US$97 per oz., well above the 54,717 oz. produced at US$230 per oz. during the third quarter of 2000. Year-to-date production totals a record 468,952 oz. at a cash cost of US$86 per oz., far outpacing the 96,855 oz. at US$228 per oz. at the three-quarter pole a year earlier.

The drastic improvement is thanks to better-than-expected performance at the company’s Red Lake mine in northwestern Ontario. The mine, now in its third quarter of commercial production, churned out 111,252 oz. at US$65 per oz. in the recent quarter, and 389,691 oz. at US$59 per oz. so far this year.

The Wharf heap-leach mine in South Dakota chipped in 23,655 oz. at US$30 per oz. during the quarter, and 79,261 oz. at US$21 per oz. so far in 2001. The company realized an average of US$274 per oz. for its third-quarter production, and US$269 per oz. so far this year.

The news from Red Lake continues to improve. In mid-September, Goldcorp upped its reserve estimate for the High Grade zone to 1.7 million tonnes grading 69.3 grams gold per tonne.

Production estimates for 2001 from Red Lake have been bumped up by 5% to 500,000 oz. at a cash cost of US$65 per oz. Overall production for the year is pegged at 600,000 oz. at a cash cost under US$100 per oz.

On the back of Red Lake’s performance, the company approved a special dividend of US10 per share, which represents a 100% increase in the annual dividend for 2001 to US20 per share.

The company expects 2001 earnings to ring in at US61 per share, up from the previous estimate of US55 per share.

At the end of September, Goldcorp had US$70.3 million in cash and short-term investments, up from US$14.3 million a year earlier.

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