UPDATE 1-Goldcorp to take charge on Argentine mine, misses 2014 output target

Mon Jan 12, 2015 6:43pm EST
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(Recasts with Cerro Negro impairment charge, sale of Wharf mine, background)

Jan 12 (Reuters) - Goldcorp Inc will take an impairment charge of up to $2.7 billion on its new Cerro Negro mine in Argentina in the fourth quarter, the world's biggest gold miner by value said on Monday as it also announced that 2014 output was below its own forecast.

For 2015, Vancouver-based Goldcorp forecast higher production and lower costs. It also announced the sale of its small Wharf gold mine in South Dakota to Coeur Mining Inc for $105 million in cash.

Goldcorp said restrictions on importing goods and services into Argentina and converting Argentine pesos into U.S. dollars, as well as high inflation in the country, will result in it reducing the value of Cerro Negro by between $2.3 billion and $2.7 billion after tax.

Cerro Negro is one of Goldcorp's two new mines and produced its first gold in July 2014. Goldcorp is expected to release its fourth quarter and full-year results on Feb. 19.

In a statement Goldcorp said the company produced 886,000 ounces of gold in the fourth quarter, bringing full-year output to a record 2.871 million ounces. That was below Goldcorp's own forecast of between 2.95 million and 3.10 million ounces.

Analysts have for some time warned that it could be a stretch for Goldcorp to meet its output forecast due to problems at some of its Mexican mines.

Goldcorp also forecast that its 2015 gold production would increase by approximately 20 percent to between 3.3 million and 3.6 million ounces of gold. The company said it expects relatively low first quarter production due to lower grades at its Penasquito mine in Mexico but that should improve later in the year.

Goldcorp forecast 2015 all-in sustaining costs at between $875 and $950 an ounce. That was well down on all-in sustaining costs of $1,045 in the fourth quarter, and $950 an ounce for 2014.

The company forecast capital spending decreasing by about 40 percent in 2015 to between $1.2 billion and $1.4 billion as its mine-building program slows down.

(Reporting by Nicole Mordant in Vancouver; editing by Andrew Hay)