Monday, February 28, 2011

Goldcorp (GG) and Inflation, Rising Costs Challenges

Goldcorp (NYSE:GG) and other gold miners have been getting the attention of some who are worried over the possible negative impact rising inflation and mining costs and how they what the impact on the mining companies will be.

The massive gold miner looks strong in reference to that, as looking at earneings 57 cents a share in the fourth quarter with production reaching 689,600 ounces of gold at total cash cost of $164 an ounce. Minus metal bi-products, Goldcorp's cash costs were $461 an ounce. Goldcorp also realized record production from three of its mines, as well as the first full quarter of production at its newer Penasquito mine.

Margins at Goldcorp also reached record levels for the company, mostly on the record high gold prices and record operating cash flows of $646.1 million, $1.7 billion for all of 2010.

Goldcorp boosted its annual dividend to 40 cents share, an 11 percent increase.

Like with its peers, inflation shouldn't be a worry to them as investors seek a safe haven to protect their assets, with gold among the favorite targets.

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