Goldcorp nearly doubles Q2 earnings to US$190 million

Vancouver – After digesting the producing Canadian assets of Placer Dome, Goldcorp (G-T, GG-N) has turned in a stellar second quarter with net earnings of US$190.4 million (US50 per share) to almost double the US$98 million (US30 per share) in 2005-Q2.

The Vancouver-based producer closed its $1.6 billion acquisition of certain Placer Dome assets (Campbell, Porcupine, Musselwhite, La Coipa and Pueblo Viejo) midway through the quarter under the agreement struck with Barrick Gold (ABX-T, ABX-N) that successfully acquired Placer in a $10-billion takeover deal. Resultantly, Goldcorp’s Q2 gold production increased 35% to 378,500 ozs. at total cash costs of minus US$123 per oz. net of by-product copper and silver credits. A gold price of US$620 per oz. was realized over the quarter, well up from the US$432 per oz. in last year’s corresponding period.

Second quarter profits were boosted by a US$61-million non-cash gain realized from a dilution clause triggered by Silver Wheaton‘s (SLW-T, SLW-N) $200-million public offering that closed in Q2.

The company is on track for 2006 gold production of 1.8 million ozs. at total cash costs of under US$100 per oz. Bullish on bullion’s outlook, none of Goldcorp’s future gold production has been hedged allowing for full realization of gains in the metal price.

Revenues of US$491.5 million were booked for the second quarter with the bulk of cash flow derived from Goldcorp’s 37.5%-owned Alumbrera copper-gold mine in Argentina, its now integrated Red Lake operations in northwestern Ontario, its 57% interest in Silver Wheaton and from the Luisman gold-silver operations in Mexico.

The company has closed a series of major acquisitions over the past two years, swallowing Wheaton River, Virginia Gold and the Canadian spoils of Placer Dome assets, to now give it third place among North American gold producers.

Despite beating the “street” earnings forecast, shares of Goldcorp closed down 42 to $34.38 on TSX trading following its August 10th profit announcement. The stock has a 52-week trading range of $19.97-to-$45.99.