Goldcorp squashes mega takeover rumors Goldcorp, which according to today's earnings report is having trouble getting enough gold out of its Red Lakes mine (headline on that story: Goldcorp warns on production outlook as Red Lake output plunges), suggested today that buying producers is not the way to increase reserves--i.e., buying early stage projects is the way to add shareholder value.
I wonder where they could find an "early stage gold project" with a very large, highly consistent proven resource in Red Lakes with excellent expansion potential--really cheap (like maybe $500mil cheap), and kind of next door to their production facilities? $500 million for maybe $16 billion in gold, with maybe $500 mil. in start-up capex (which might be covered by a high-grade starter pit)......?? Pardon the optimistic views. From Reuters:
By Euan Rocha
TORONTO | Tue Mar 27, 2012 8:12pm EDT
TORONTO (Reuters) - Canadian miner Goldcorp (G.TO) would consider acquiring early stage gold projects to boost its reserve base, but the country's second largest gold miner has no real interest in buying producingassets that generate little value for its shareholders, Chief Executive Chuck Jeannes said on Tuesday.
"It is very hard to add significant value for your own shareholders when you buy a producing asset," said Jeannes. "You are just usually trading dollars for future production."
Vancouver-based Goldcorp, which is already on-track to boost its production by 70 percent over the next few years, has been touted by some bankers and analysts as a potential acquirer of Kinross Gold (K.TO) and Agnico-Eagle (AEM.TO), two of its smaller rivals that have seen their share prices tumble in the face of major operational setbacks at certain mines.
....all of this is just of course wild-eyed thoughts. Do your own DD.