February 19, 2015 / 2:18 PM / 3 years ago

Goldcorp posts big loss on writedown, stock drops

TORONTO (Reuters) - Goldcorp Inc (G.TO) posted a hefty loss on Thursday as it took a $2.3 billion impairment charge on a new mine in Argentina, the second multi-billion dollar writedown from a top gold miner in as many days.

Goldcorp, the world’s biggest gold producer by market value, reported a $2.4 billion fourth-quarter net loss more than double last year‘s, as well as adjusted earnings that missed analysts forecasts, sending its shares down 5 percent.

The charge follows an even larger $2.8 billion writedown reported by Barrick Gold Corp (ABX.TO), the world’s top gold producer by production. Barrick also said it will sell mines in Papua New Guinea and Australia to help cut debt by at least $3 billion by year-end.

Shares in Barrick, which reported results on Wednesday after the market closed, rose nearly 6 percent.

Goldcorp said its quarterly adjusted earnings fell to 7 cents a share from 9 cents last year, trailing the average analyst estimate of 12 cents, according to Thomson Reuters I/B/E/S.

RBC Capital Markets analyst Stephen Walker said the miss reflects the timing of concentrate sales, which could boost first-quarter results.

Goldcorp said its 2015 outlook is brighter, as production climbs and spending drops.

The company repeated 2015 estimates announced in January, but cut its gold reserves by 8 percent to 49.6 million ounces. Goldcorp said some gold had been mined and exploration drilling results from its Cerro Negro mine were too late for inclusion.

It had warned it would reduce the value of Cerro Negro, one of its two new mines, by up to $2.7 billion, due to high inflation, currency fluctuations and Argentine import restrictions.

Goldcorp forecast 2015 all-in sustaining costs of $875 to $950 an ounce, down from $949 in 2014. This measure, which producers adopted in 2013, includes sustaining capital, exploration costs and general expenses.

The Vancouver, British Columbia-based company expects to produce 3.3 million to 3.6 million ounces of gold in 2015, up from 2.87 million ounces in 2014, and forecasts capital expenditures of $1.2 billion to $1.4 billion, down from $2.126 billion.

Increased production coupled with lower spending signals “significant” free cash flow for 2015, Chief Executive Officer Chuck Jeannes said in a statement.

He also said Goldcorp could pursue growth opportunities. Last month, it agreed to buy explorer Probe Mines Ltd (PRB.V) in a stock deal worth about C$526 million ($419.76 million).

Editing by Bernadette Baum and Lisa Von Ahn and Christian Plumb

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