Goldcorp (GG, Financial) announced the controlled shutdown of operations at Penasquito mine in northern Mexico for the continuation of the protest that began with the blockade of the access to the mine by the trucking contractor last Monday, Sept. 26.
It seems that at the basis of the protest was not only wage demands but also for environmental reasons.
Goldcorp is available to listen to workers' demands by opening the dialogue with their representatives, but at the same time the Canadian company announced it is taking action against protesters who are illegally blocking access to the mineral deposit and thus preventing the continuation of mining activities.
Penasquito is the largest gold producer in Mexico and it consists of two open pits, Penasco and Chile Colorado. The mineral deposit also contains silver, lead and zinc. It is located in the northeastern part of the State of Zacatecas in north-central Mexico, approximately 8.7 miles east of the town of Mazapil.
Goldcorp does not expect that the shutdown of operations will negatively impact the overall production and cost guidance for 2016. Hopefully, Goldcorp will quickly obtain the support from the Mexican government for the removal of the blockade.Â
In fiscal year 2015, Penasquito mine generated revenue of $1,646 million, approximately 38% of total revenues and produced 860,300 ounces of gold, approximately 25% of the total gold production, at an AISC of $544 per ounce.
At the moment, Goldcorp is trading around $15.94 per share, down 59 cents (or -3.57%) from the previous close.
The stock gained 37.63% year to date, but lost 16.83% since the beginning of the third quarter of 2016.
The Enterprise Value/EBITDA is 11.79 and the Price/Book (mrq) is 1.03.
Disclosure: I have no positions in Goldcorp Inc.
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