A Look at Goldcorp’s 20/20/20 Growth Plan in Q2 2018


Jul. 23 2018, Updated 9:00 a.m. ET

Goldcorp’s outperformance

After underperforming its peers in 2017, Goldcorp (GG) stock has outperformed YTD (year-to-date). It’s also one of the few major gold stocks to have recorded a positive return YTD performance of 3.6% as of July 13.

In comparison, the VanEck Vectors Gold Miners ETF (GDX) has fallen 5.5% while the iShares Gold Trust ETF (GLD) has lost 4.9%. Peers Barrick Gold (ABX), Kinross Gold (KGC), and Agnico Eagle Mines (AEM) have fallen 10.8%, 12.7%, and 1.4%, respectively, through July 13.

While its performance in 2017 wasn’t up to market expectations, its outlook seems much brighter. Management announced a five-year plan in 2017 to create value for the company by improving its production, reserves, and unit costs by 20.0%.

Investors can read Market Realist’s series Can Goldcorp Continue Its Outperformance after a Weak 1Q18? for more on Goldcorp’s outlook. The company plans to release its detailed second-quarter earnings report on July 25 after the market closes. It’s slated to hold a conference call on July 26.

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20/20/20 growth plan

Goldcorp has outlined its 20/20/20 growth plan, which aims at improving production, reserves, and unit costs by 20.0% each by 2021. The company provides an update on the progress of these variables along with its quarterly results. It should be interesting to see how its production growth and unit cost progress going forward.

Project pipeline

Goldcorp has one of the strongest project pipelines in the industry. These projects underpin the company’s 20.0% growth in reserves by 2021 as well as the improvement in production and costs. So, investors should be awaiting an update on these projects’ progress.

Among Goldcorp’s peers (JNUG)(GDX), Barrick Gold (ABX) has the lowest AISC. It expects to achieve AISC below $700 per ounce by 2019. Newmont Mining (NEM) has a 2018 cost outlook of $965–$1,025 per ounce. Despite achieving cost improvements, some view Kinross Gold (KGC) as a rather high-cost precious metal producer.


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