Goldcorp may take $2.7 billion writedown on mine
(Minews) - Goldcorp Inc. (G), the largest gold miner by market value, may take an impairment charge of as much as $2.7 billion on its Cerro Negro mine in Argentina because of foreign-exchange restrictions and inflation in the country.
The after-tax asset writedown would be recorded in the fourth quarter, the Vancouver-based company said today in a statement. Goldcorp started production at Cerro Negro in July.
Operations at the mine are being hurt by import restrictions in Argentina and limits on converting the local currency into dollars, Goldcorp said. The company is running impairment testing at Cerro Negro after declaring commercial production at the mine on Jan. 1.
Goldcorp, which operates mines in the Americas, is among producers seeking to reduce costs and trim spending after gold prices fell for a second consecutive year. The company is phasing out extraction in an area of its Red Lake mine in Canada because the operation doesn’t meet requirements for returns. Goldcorp also announced it agreed to sell a mine in South Dakota to Coeur Mining Inc. for $105 million.
“At all of our mines and projects, the focus remains on profitable gold production that demonstrates clear returns for shareholders,” Chief Executive Officer Chuck Jeannes said in the statement. “We have eliminated marginal ounces that do not meet this objective from our mine plans.”
The company today said it produced 2.87 million ounces of gold last year, missing an Oct. 30 forecast of at least 2.95 million ounces. Output this year is expected to be 3.3 million to 3.6 million ounces of gold at average costs of $875 to $950 per ounce.
Goldcorp dropped 5.1 percent to C$24.31 at the close in Toronto.
Publish date : Thursday 15 January 2015 08:29
Story Code: 19513
