You are here

Gold plunge to $900 wouldn't bother Goldcorp; it would buy poorer miners

Section: Daily Dispatches

The poorer miners are acting as if a price plunge wouldn't bother them either.

* * *

Goldcorp CEO Says Gold Price Plunge to $900 Would Be an Opportunity, Not a Disaster

By John Shmuel
National Post, Toronto
Saturday, September 6, 2014

http://business.financialpost.com/2014/09/06/goldcorp-inc-ceo-says-gold-...

TORONTO -- The chief executive of Goldcorp Inc. is not fretting over lower gold prices this year and says he would view any price declines as an opportunity to buy assets.

In an interview with the Financial Post on Friday, Charles Jeannes, president and CEO of Goldcorp, spoke about the company's growth prospects in the next year.

Gold prices have steadily pulled back since 2011, when they reached a record intra-day price of US$1,909 an ounce. Prices for the precious metal closed Friday at US$1,268.81 an ounce.

... Dispatch continues below ...



ADVERTISEMENT

Free Storage with BullionStar in Singapore Until 2016

BullionStar is a Singapore-registered company with a one-stop bullion shop, showroom, and vault at 45 New Bridge Road in Singapore.

BullionStar's solution for storing bullion in Singapore is called My Vault Storage. With My Vault Storage you can store bullion in BullionStar's bullion vault, which is integrated with BullionStar's shop and showroom, making it a convenient one-stop-shop for precious metals in Singapore.

Customers can buy, store, sell, or request physical withdrawal of their bullion through My Vault Storage® online around the clock. Storage is FREE until 2016 and will have the most competitive rates in the industry thereafter.

For more information, please visit Bullion Star here:

https://www.bullionstar.com/



"We're a low cost producer and we've done most of the investing we need to to secure our future," Mr. Jeannes said. "Building these new mines over the last four years, even if we see gold go down to US$900 -- which I don't think we will -- we'd look for opportunities. Things come for sale at that price."

In January, Goldcorp launched a $2.6-billion hostile bid to buy gold miner Osisko Mining Corp. Goldcorp raised that bid to $3.6-billion a few months later, but ultimately let the offer expire following the launch of a rival bid from Yamana Gold Inc. and Agnico Eagle Mines Ltd.

Mr. Jeannes said on Friday that despite the failed bid, he is not rushing to look for another large acquisition in its place.

"Some people think we went hunting and we didn't get our prey, so we're standing there with gun loaded and ready to shoot again," he said. "It was an opportunity we wanted to take advantage of and it didn't work. So we're just back to our normal work."

Goldcorp is set to see three new mines come online in the next year, including the Cerro Negro project in Argentina, the Éléonore gold project in Quebec and the Cochenour project in Ontario.

This week the company announced it was suspending mining at its El Sauzal gold mine in northern Mexico, following wall instability inside its pit.

Mr. Jeannes said Friday that a worst case scenario could see the mine closed, but since it was already scheduled to shut down this year, he says the loss of production would "not be significant." He did note that it's likely that production would come in at the low end of Goldcorp's guidance of 2.95 million to 3.1 million ounce of gold mined this year if the mine is closed.

Mr. Jeannes said one issue he is paying attention to are the recent discussions about how Ontario's cash-strapped government can raise new revenue.

"We're an industry that in other countries and other jurisdictions have been a target for tax increases and it's really hurt," he said. "It hurts the businesses there and it's caused layoffs, or lack of growth and it's hurt employment and it's hurt secondary and tertiary businesses."

"I would just hope that there is good, thoughtful discussion around that before someone thinks let's look to the mining industry to raise revenue," he said. "If you look at our profits, there's not much room for more taxes."

Goldcorp earned US$181 million in its latest quarter, a big rebound in profits following a huge loss a year earlier when it wrote down its Penasquito mine and Cerro Blanco project.

Mr. Jeannes said despite fiscal concerns in Ontario, he still sees Canada as one of the best jurisdictions to do mining in.

"We would have all of our mines in Canada if we could," he said.

* * *

Join GATA here:

Casey Research 2014 Summit
Hill Country Resort and Spa
San Antonio, Texas
Friday-Sunday, September 19-21, 2014

http://www.caseyresearch.com/summit/2014-fall

Canadian Investor Conference
Sheraton Centre Toronto Hotel
Toronto, Ontario, Canada
Thursday-Friday, September 25-26, 2014

http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-...

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana
Wednesday-Saturday, October 22-25, 2014

https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520...

Mines and Money London
Business Design Centre
London, England, U.K.
Monday-Friday, December 1-5, 2014

http://www.minesandmoney.com/london/

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16