(Reuters) - Canadian gold producer Goldcorp Inc on Wednesday reported better-than-expected earnings, returning to a profit in the first-quarter on the back of higher production and lower costs.
Goldcorp, the world’s third-biggest gold producer by market value, left unchanged its 2016 production and cost forecast.
Goldcorp’s two newest mines, Eleonore in Canada and Cerro Negro in Argentina, continued to ramp up in the quarter and underground mine development is “advancing well,” Chief Executive David Garofalo said in a statement.
Goldcorp said it will decide around mid-year whether to go ahead with two proposed projects, the Penasquito pyrite leach plant in Mexico and the Musselwhite materials handling venture in Ontario, Canada.
Earlier on Wednesday, Goldcorp reported net earnings of $80 million, or 10 cents a share, for the three months to end-March. That compared with a net loss of $87 million, or 11 cents per share, a year earlier. In the fourth quarter, Goldcorp reported a net loss of $4.27 billion, or $5.14 per share.
Excluding non-cash and one-time items such as a foreign exchange loss and restructuring costs, earnings in the first quarter were $50 million, or 6 cents a share, beating the 4 cents consensus estimate of analysts polled by Thomson Reuters I/B/E/S.
Production at Goldcorp, which operates only in the Americas, including the United States and Mexico, increased to 783,700 ounces in the first quarter from 724,800 ounces in the year-ago period.
All-in sustaining costs to produce an ounce of gold fell to $836 from $885 a year ago.
Free cashflow was a negative $101 million in the first quarter, down from a negative $321 million a year ago, because of an increase in working capital, Goldcorp said. The company said it expected to be “substantially free cash flow positive” for the full year.
Goldcorp will increasingly look for large gold deposits outside the Americas as they have become scarcer in the region, Garofalo said in January. He tagged Europe and Africa as possible locations for acquisitions.
Reporting by Nicole Mordant in Vancouver; Editing by Tom Brown and Richard Chang