Long-Term Lower Gold Supply To Help Gold Prices – Goldcorp’s Chuck Jeannes – by Alex Létourneau (Kitco News – October 30, 2014)

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(Kitco News) – Goldcorp Inc. (TSX:G)(NYSE:GG) is bullish on longer-term gold prices, and it’s not based on what the Fed may or may not do, said a Goldcorp executive.

Speaking on the company’s third-quarter conference call, Chuck Jeannes, president and chief executive officer, made it clear that the focus on gold prices shouldn’t be near-sighted.

“During most of this year, the debate of when and how the U.S. Federal Reserve would raise interest rates helped fuel the downward pressure on gold price, and we’re seeing that today,” Jeannes said. “I believe this focus on short-term gold catalysts ignores an important trend in greater long-term importance.

“Put simply, our industry is not discovering as much gold as it once did despite significant increase exploration investment,” he continued. “As such, it is reasonable to conclude that global gold production is facing a sustained multi-year decline that cannot help but positively impact the supply/demand fundamentals, and therefore the price of gold.

“In other words, I don’t believe our industry will ever mine as much gold as we do in 2015,” he added. Jeannes said the company is bullish on long-term gold prices and believes that will translate into more success for companies well placed down the line.

Touching on the company’s earnings, Jeannes said he was pleased with the third-quarter results, highlighting the Eleonore and Cerro Negro mines coming online on time and on budget during the quarter.

Goldcorp reported a net loss of $44 million, or 5 cents per share, in the third quarter, compared to net earnings of $5 million, or 1 cent per share, in last year’s comparative quarter.

The company’s Mexican-based Peñasquito mine was hit with a $36 million, or 4 cents per share, non-cash reduction on the value of low-grade stockpiles at the mine.

They also absorbed “unusual losses,” as Jeannes put it, of $85 million from foreign exchange translation of deferred income tax assets and liabilities, $14 million in losses on derivatives and $13 million in losses on the impairment against the carrying amount of El Sauzal as a result of accelerating closure activities due to previously reported pit wall instability, the company said.

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