Yahoo Finance Goldcorp (GG) Divests Los Filos Mine to Leagold Mining
Goldcorp Inc. GG has agreed to sell its Los Filos Mine located in Mexico, to Canadian company, Leagold Mining Corporation in a share purchase agreement. The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2017.
Goldcorp is anticipated to receive a $438 million consideration, comprised of $279 million in cash, $71 million worth Leagold common shares as well as roughly $88 million worth tax receivables that the company will retain on conclusion of the transaction. The shares issued to Goldcorp will represent about 30% of the issued and outstanding common shares of Leagold on the close of the transaction. With this deal, the company expects to recognize reversal of a 2015 impairment in mining interests at Los Filos of about $30 to $60 million, on a pre-tax basis.
The sale of Los Filos by Goldcorp is consistent with its aim to concentrate on core assets to boost the net asset value per share.
Recently, Goldcorp also announced the sale of its 100% interest at the Cerro Blanco project in Guatemala to Bluestone Resources Inc. The company will receive $18 million in cash, 1% Net Smelter Return royalty on production as well as common shares representing roughly 9.9% of Bluestone’s issued and outstanding common shares on the conclusion of the transaction.
Goldcorp’s shares have gained 2.1% in the last three months while the Zacks categorized Mining-Gold industry lost about 1.3% over the same period.
In third-quarter 2016, Goldcorp’s adjusted earnings of 11 cents per share missed the Zacks Consensus Estimate by a penny. Goldcorp’s revenues also missed the estimate on lower gold as well as silver sales, year over year. For 2016, the company reiterated its gold production guidance range of 2.8–3.1 million ounces at AISC of $850–$925 per ounce. Production in the fourth quarter is expected to rise from the third quarter as Penasquito continues mining higher grades.
Some Stocks to Consider
Some well-placed companies in the mining space at present are Vale S.A. VALE, Teck Resources Limited TECK and Pretium Resources Inc. PVG.
Vale reported a positive earnings surprise of 35.71% in the last reported quarter and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Teck Resources, also carrying a Zacks Rank #1, has an expected long term growth rate of 10.65%.
Pretium Resources, holding a Zacks Rank #2 (Buy), has an average positive earnings surprise of 14.58% over the trailing four quarters.
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