UPDATE 2-Goldcorp earnings beat estimates, production costs fall

Thu Jul 31, 2014 3:47pm EDT
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(Recasts with CEO interview, conference call)

By Nicole Mordant

VANCOUVER, July 31 (Reuters) - Goldcorp Inc reported stronger-than-expected quarterly earnings on Thursday as the company, the world's biggest gold producer by market value, reined in production costs, but its shares slid along with other gold stocks as the price of bullion fell.

Costs plunged at Goldcorp's Penasquito mine in Mexico as it pushed to boost efficiency and grades improved. All-in sustaining costs at Goldcorp's biggest producing mine dropped to $362 an ounce from $1,484 a year earlier.

"I am really, really pleased with what is going on a Penasquito. They are hitting on all cylinders," Goldcorp Chief Executive Chuck Jeannes said in an interview.

Company-wide, costs improved to $852 an ounce from $1,227 an ounce.

Goldcorp now expects costs toward the low end of its forecast range of between $950 an ounce and $1,000 per gold ounce for the full-year.

For more than a year, gold producers globally have been on a cost-cutting tear, to restore profits hit in recent years by soaring mine site costs, overpriced acquisitions and a 28 percent drop in the bullion price last year.

That is even as spending on sustaining capital, or investment required to sustain existing production, is expected to increase significantly in the second half of 2014.   Continued...