(Updated from May 5)NEW YORK ( TheStreet ) -- Goldcorp (GG - Get Report), the crème de la crème of gold growth stocks, turned in a strong quarter, but, according to CEO Chuck Jeannes, the results don't mean a dividend hike anytime soon.
Jeannes says the back half of the year will be better for Goldcorp as it is still working out kinks at Penasquito as the company ramps up its sulfide plant.
"We tend to look much longer term at the performance of our mines than on a quarter to quarter basis. Unfortunately that's not the way the market looks." Jeannes says Penasquito production is still on track for the year at 350,000 ounces of gold. Goldcorp must also contend with controversy surrounding its Marlin mine in Guatemala, where gold production was 16% lower than the fourth quarter. This is primarily due to environmental allegations by the American Commission on Human Rights. According to the earnings report, "operations continue normally."
"The market takes 400,000 guidance for the year and divides by four but the mine sequencing is never that simple ... [We] expect to meet production guidance there as well," says Jeannes. Goldcorp was able to deliver killer margins -- $1,206 for the first-quarter -- but now the heat is on to temper inflationary pressures and to keep delivering the goods. According to Jeannes, Goldcorp is on track to produce 2.65-2.75 million ounces of gold for 2011 at cash costs between $280-$320 an ounce, "but if the improving trend in cash costs continues we may revisit our guidance," meaning the company could actually lower their cash costs, especially if oil prices stay lower. Total operating costs will still increase 6% for 2011 as labor costs rise and power and oil expenses stay volatile.