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Goldcorp Outperformed Its Peers in Q1—Could This Continue?

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Updated

Goldcorp’s earnings beat

Goldcorp’s (GG) fourth-quarter EPS came in at $0.07, which beat the consensus estimate of $0.04. GG’s revenue of $772.0 million, however, missed analysts’ estimate by ~7.4%. In addition to this, GG achieved significant milestones during the quarter. It achieved its first gold pour at Peñasquito’s Pyrite Leach project in November and commercial production in December.

Porcupine’s Borden project has received permitting as it advances toward commercial production. GG’s Coffee project has also advanced toward the late stages of permitting and project engineering.

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Newmont-Goldcorp merger

Goldcorp’s earnings beat in the fourth quarter came after three consecutive quarters of missed expectations. Investors and analysts were disappointed by the company’s performance, driving its stock price down in 2018. In 2019, however, the stock got a boost on January 14, when Newmont Mining (NEM) and Goldcorp announced a merger whereby Newmont would acquire Goldcorp in a stock-for-stock transaction valued at ~$10 billion.

Updated guidance

Goldcorp has guided for 2.2 million–2.4 million ounces of gold (GLD) (IAU) production in 2019. This guidance is in line with the company’s 2.3 million ounces of production in 2018. Its AISC (all-in sustaining costs) in the fourth quarter came in at $765 per ounce, a fall of 12% compared to the fourth quarter of 2017. GG is guiding for AISC of between $750 and $850 per ounce in 2019.

Newmont Mining and Goldcorp are expected to provide updated guidance for the combined company after the merger, which is expected to complete in the second quarter of 2019.

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