Goldcorp operating profit lifted by bullion price

Wed Feb 15, 2012 9:35pm EST
 
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By Euan Rocha

TORONTO (Reuters) - Canada's No.2 gold miner, Goldcorp (G.TO: Quote), reported a 23 percent increase in its operating profit on Wednesday, topping expectations as sharp gains in the price of bullion drove earnings growth in the quarter.

The Vancouver, British Columbia-based miner also announced that its proven and probable gold reserves increased 8 percent to 64.7 million ounces in 2011, while its measured and indicated gold resources rose 10 percent to 28.2 million ounces, on the back of continued success in its exploration program.

"We see continued opportunity for growth in the existing reserve base and I believe we have the opportunity to more than replace reserves when we calculate them at the end of 2012," chief executive Chuck Jeannes said in an interview. "The primary mines we expect growth at would be Cerro Negro in Argentina and Éléonore in Quebec."

Jeannes remains confident that the company is well placed to grow its gold production by 70 percent to 4.2 million ounces in 2016.

Beginning later this year, Goldcorp is set to bring on-line four new mines that will help it achieve this goal. The company and its larger rival, Barrick Gold (ABX.TO: Quote), are expected to begin production from their jointly-owned Pueblo Viejo project in the Dominican Republic later this year.

Gold production at its Cerro Negro project in Argentina is set to begin in 2013, while first gold from both Cochenour and Éléonore in Canada is expected in 2014.

QUARTERLY RESULTS

After excluding impairment charges related to equity investments, certain non-cash revisions in mine-closure costs and other one-time items, the company reported earnings of $531 million, or 66 cents a share, up from a year-earlier profit of $431 million, or 59 cents a share.   Continued...