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Gold sector's bad bets wiping out lifetime earnings -- and investor confidence
By Peter Koven
National Post, Toronto
Wednesday, January 14, 2015
TORONTO -- Goldcorp Inc. could soon join an inglorious group: large gold miners that have a net loss to show for their entire history as corporate entities.
The Vancouver-based company warned this week that it expects to record an impairment charge of US$2.3 billion to US$2.7 billion on its Cerro Negro mine in Argentina. Given that Goldcorp's retained earnings were US$2.2 billion as of Sept. 30, they may be completely wiped out in the company's next quarterly report.
That would not be unusual in the gold industry, where writedowns have destroyed historic profits in recent years. Barrick Gold Corp. has retained earnings of negative US$7.8 billion, while Kinross Gold Corp. is at minus US$8.5 billion. AngloGold Ashanti Ltd. has a US$4 billion historic loss, while Agnico Eagle Mines Ltd. has a slimmer loss of US$740 million.
These companies have highly profitable operations that continue to perform well in a tough gold market. But they paid the price for taking risky bets that backfired and crushed shareholder value when gold prices dropped. ...
... For the remainder of the report:
http://business.financialpost.com/2015/01/14/inglorious-writedowns-gold-...
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