Cameron French, Reuters
Published: Wednesday, May 21, 2008
TORONTO- Flush with cash and sporting no debt, Goldcorp would seem to have themeans to go on a multibillion-dollar acquisition spree similar to theone that made the Canadian miner a top global player two years ago. ButGoldcorp, the world's second-biggest gold company by marketcapitalization, says it wants no part of blockbuster M&A deals, andwill instead target small development players that will add to itspipeline of future production rather than bulk up its current roster ofmines.
"We don't want to buy things that are already operating.We want to buy something early stage, tip of the iceberg, somethingbigger than what we see is apparent on the surface," chief executiveKevin McArthur said in an interview after Goldcorp's annual meeting inToronto.
With major gold discoveries increasingly scarce, andrising gold prices pushing valuations of established producers higher,development-stage companies have become the new target of operatorswho'd rather not pay a premium for mines that have already been built.
"Thejuniors discover gold a lot better than the seniors do, they do a verygood job. And we look for those juniors," McArthur said.
Goldcorp spent about $10 billion two years ago on mid-tier gold producer Glamis Gold as well as some assets of Placer Dome.
Thecompany has struggled at times since then to smoothly incorporate thenew assets, but now sports no debt, about $1 billion in annual cashflow, and $1.3 billion in cash.
It expects to produce 2.6 million ounces this year, and hopes to raise that by about 50 percent over the next five years.
"Our goal is to grow to 3 to 4 million ounces per year, and have that go on forever," McArthur said.
TheVancouver-based company's top priority is for exploration and expansionat its current projects, and it hopes to expand its flagship Red Lakemine in Ontario to a million-ounce producer by 2012.
The mine yielded about 700,000 ounces last year.
Goldcorpshares, which have risen 68 percent over the past 12 months, climbedC$1.34, or 3.2 percent, to C$42.65 on the Toronto Stock Exchange onTuesday. |
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