Goldcorp Dances a Rumba
June 25, 2010
– Comments (6) |
RELATED TICKERS: GG
, AUY
, NEM
This one is in honor of my lovely wife, who dances a mean Rumba. :)
Goldcorp Dances a Rumba
http://www.fool.com/investing/international/2010/06/25/goldcorp-dances-a-rumba.aspx
Excerpts:
"Goldcorp stepped smoothly into the early completion of a key second sulphide processing line at its emerging flagship Penasquito mine in Mexico this week. In the line's initial days of operation, Goldcorp reported peak throughput rates in excess of design capacity. By doubling mill capacity and proceeding to the final phases of construction, Goldcorp remains on track to achieve the mine's designed capacity of 130,000 tons per day by early 2011. Along the way, management expects Penasquito to yield 180,000 ounces of gold in 2010; and ramp up from there to record a long-term annual average of 500,000 ounces."
"Although Goldcorp's leading cost profile among industry majors was recently eclipsed by rival Newmont Mining (NYSE: NEM), Goldcorp's five-year forecast for costs beneath $300 per ounce (using a conservative basis of $1,000 gold and $16 silver) telegraphs a dominant position on the profitability scale. Over that same period, it is expected that production will rise by nearly 50% to 3.8 million ounces per year. As a result, over the long haul, I expect the cash flow from cash cows like Penasquito to boost Goldcorp's proven record as a leader in the industry's long-running consolidation trend."
"The emerging uncertainty surrounding the Marlin operation is an unfortunate development for a company that has been hitting its stride on all fronts over recent years. Ultimately, I expect imminent strength in gold prices to effectively counteract any ill effect from this singular snag, and I continue to rate Goldcorp as a superior choice among major gold miners. If chasing a red-hot growth stock near its 52-week high is just not your style, consider this low-cost producer that I have routinely highlighted as the most persistent bargain in gold: Yamana Gold (NYSE: AUY)."
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