Goldcorp Inc. (GG)
The price of gold is more than $ 100 per ounce below last year’s levels. And it is expected to continue a bit more like that and with high volatility. Earlier in the year, China’s stock market problems and its currency devaluation diverted investors’ attention and their funds towards gold which is seen as a safe haven in tough times. But an opposite force called the strengthening US dollar started acting against any chance of a medium term up-trend in gold prices. Further volatility is added by investor anxiety about the impending Fed rate hike which is on cards sooner or later. The movement in gold prices highly affects the stock prices of gold miners. Most of them nearly track gold prices for most part of the year. Similar is the case with Goldcorp Inc. (GG). The stock took off from a yearly low of $ 12.61 as soon as the company announced its solid Q2 results on July 31. On August 21, it traded at $ 15.49. But as that result became 1 month old and the date of Fed rate hike neared, gold prices again took full control of Goldcorp’s stock price. On Wednesday September 9th, Goldcorp’s share price…show more content… The company had a record gold production of 908,000 ounces during the three months period to 30th June. The company’s average all in sustaining cost (AISC) for the quarter was quite low at $ 846 per oz. The cost control helped the company in generating a free cash flow of $ 174 million in Q2. Further, the company has taken certain cash generating and cash saving measures like selling its 26% stake in Tahoe Resources (TAHO), increased credit facility from $2 billion to $3 billion and a 60 % reduction in monthly dividend to $0.02 per month. As a result Goldcorp is able to reduce some of its debt and further strengthen its balance sheet at a time when competitors like Barrick Gold (ABX) are forced to sell valuable assets for the same