TORONTO (Reuters) - Goldcorp Inc (G.TO) (GG.N) shares tumbled 10 percent on Thursday while stocks of several top gold miners made gains, after the world’s most valuable bullion producer posted a surprise loss on an inventory writedown and declining prices.
The Vancouver-based company was overshadowed by better quarterly results from the world’s largest gold producer, Barrick (ABX.TO), whose stock rose 1.9 percent; Newmont (NEM.N), up 4.1 percent; and Agnico-Eagle (AEM.TO), whose shares rose 0.7 percent.
“When companies are delivering good results, their share prices are reflecting it,” said Dundee Capital Markets analyst Josh Wolfson. “Investors are looking for tangible results.”
Goldcorp reported an adjusted loss of $37 million, or 4 cents a share, which included a writedown on stockpiles of $40 million, or 5 cents a share.
Analysts, on average, expected an adjusted profit of 4 cents, according to Thomson Reuters I/B/E/S.
Production and development challenges also raised concerns.
An issue with iron sulfides at the Eleonore mine impacted third-quarter recoveries. Combined with a previous problem, that could hurt its 2015 output forecast of 250,000-270,000 ounces of gold, said Chief Operating Officer George Burns.
Last month, Goldcorp trimmed Eleonore’s full-year output estimate due to lower gold grades from unexpected folds and faults in the ore body.
A production ramp-up at its Cochenour mine in Canada also hit a bump with engineering work taking longer than expected. The ramp up was seen happening throughout 2016, but will now happen in late 2016 and into 2017.
Goldcorp Chief Executive Chuck Jeannes said the market is overreacting to headline numbers that mask strong results.
“I absolutely think it’s overdone. I‘m always surprised by how one day, a quarter of the market cares so much about GAAP (generally accepted accounting principles) earnings and whether there’s a miss or not,” he said in an interview.
“The operations performed extremely well, we grew production, our cash all-in-sustaining costs were down, we generated $243 million of free cash flow, paid down debt, put money in the bank. All the things that you’re supposed to do.”
Goldcorp confirmed its 2015 forecast for production at the high end 3.3-3.6 million ounces of gold, all-in sustaining costs of $850 to $900 an ounce and capital spending of $1.2-$1.4 billion.
All-in sustaining costs to produce one ounce of gold fell to $848 in the quarter, from $1,066 last year. Gold production increased to a record 922,200 ounces from 651,700, but the price fell to $1,114 per ounce from $1,266.
Reporting by Susan Taylor; Editing by Jeffrey Benkoe and Alan Crosby