Goldcorp Withdraws EIS for El Morro, Starts New Studies
Goldcorp. Inc. (GG) recently stated that it has withdrawn Environmental Impact Study (EIS) for its El Morro gold and copper project in Chile, respecting the Chilean Supreme Court’s ruling to invalidate RCA 232 – an Environmental Assessment Resolution. The project team has started new studies, which will establish the optimal new development plan for the El Morro project that meets Goldcorp's investment return criteria.
In Oct 2014, the Chilean Supreme Court issued a final ruling that served to invalidate RCA 232, which was issued a year earlier by the Atacama Region environmental authority that approved the EIS.
Goldcorp said that it will abide by the final verdict of the Chilean Supreme Court and is committed to having an open and transparent dialogue with all stakeholders and to maintaining the highest standards of health, safety, and environmental stewardship everywhere the company operates. The company has decided to provide an even stronger project that provides considerable mutual benefits to the surrounding community, its employees and shareholders.
El Morro, in which Goldcorp holds a 70% stake, contained proven and probable gold reserves of 6.73 million ounces and proven and probable copper reserves of 4.89 billion pounds as of Dec 31, 2013.
Goldcorp’s shares gained nearly 8% to close at $20.02 last Friday. The stock is down roughly 18% over a year.
Goldcorp, one of the leading gold mining companies along with Barrick Gold (ABX), Newmont (NEM) and Kinross Gold (KGC), released its third-quarter 2014 results in October. The company’s adjusted earnings (excluding one-time items) decreased 63.2% to $70 million or 9 cents per share in the quarter from $190 million or 23 cents a share earned in the year-ago quarter. Earnings per share missed the Zacks Consensus Estimate of 18 cents. Earnings were impacted by non-cash reduction in the value of low-grade stockpiles at the Penasquito mine.
Net loss, as reported in the quarter, was $44 million or 5 cents per share, in contrast to net earnings of $5 million or a penny per share in the year-ago quarter. Goldcorp posted revenues (as adjusted) of $1,088 million in the quarter, down 6.2% year over year. It missed the Zacks Consensus Estimate of $1,111 million.
Goldcorp expects to meet its production guidance for 2014 but due to the lower-than-expected production at El Sauzal due to pit wall instability and second-quarter 2014 stoppage at Los Filos the company now expects gold production to be at the low end of its previous guided range of 2.95 million and 3.1 million ounces.
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