Goldcorp Says Peru and Nevada Would Make Portfolio Perfect
This article was sent to me by a listener and it is worth a quick read. In a slow market it is very important to watch and listen to what the major players are doing. The major had to clean up their act after making a lot of poor investments back at the top of the market. These companies will be the ones to buyout the smaller companies and give investors the much needed liquidity event.
Click here to visit the original posting site over at Bloomberg.
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CEO says it could take 5-10 years to find ideal assets
- Company to keep focus on internal growth, big spend after 2020
Goldcorp Inc. Chief Executive Officer David Garofalo says he’s happy with his company’s portfolio of assets, but that doesn’t mean he doesn’t have a wish list.
In an ideal world, the company would have an asset in Nevada’s Carlin Trend. “If you’re an Americas-based gold company, you should be there. Barrick and Newmont are there and we should be there,” he said in an interview in Toronto, adding he’d also like to acquire something in Peru. “Those are the two holes in our portfolio geopolitically I’d love to be able to fill in due course.”
Barrick Gold Corp. and Newmont Mining Corp., the two largest producers of the precious metal, both have significant assets in Nevada and mines in Peru.
Finding the right assets in those locations could take five to 10 years, and would likely be funded by selling stakes in less attractive junior assets, Garofalo said. “Now that we have this $250 million portfolio of juniors, our grassroots exploration becomes self funding because if we find something we want to invest in, something else gets sold at the bottom.”
But for now, Vancouver-based Goldcorp is happy with its portfolio, which does include a 10 percent stake in Nevada explorer Gold Standard Ventures Corp. It’s focused on boosting production to 3 million to 4 million ounces a year by 2021, while slashing costs. By 2020, it expects to bring net debt to zero.
That will allow capital spending to ramp up significantly. Between 2020 and 2025, Garofalo expects “billions of dollars of expenditure” with the aim of developing three key projects: its Norte Abierto joint venture with Barrick, its NuevaUnion venture with Teck Resources Ltd., and its wholly-owned Century project. The first two are located in the Atacama Region of Chile and the third in Ontario, Canada. Pre-feasibility work has been done on NuevaUnion and Century while the “massive” Norte Abierto deposit is still at the concept stage.
Using free-cash flow to fund that development will take priority over increasing the dividend, he said.
“Our focus right now is on debt reduction, growth, and in the fullness of time we can revisit our dividend as we get through the growth phase,” Garofalo said. The company doesn’t have any share buyback plans either. “What we’re trying to do is distinguish ourselves as the growth vehicle in a sector that’s still shrinking.”
(WKM) West Kirkland Reports 43m of 3.40 grams per tonne at surface Near Hasbrouck Project, Tonopah, Nevada
May 22, 2018
https://ceo.ca/@nasdaq/west-kirkland-reports-43m-of-340-grams-per-tonne-at
Scorpio and West Kirkland on on the same Walker trend that has investors so giddy about Corvus and Northern Empire, but few even realize the lay of the land.
Here is a helpful map (Northern Empire now holds the “Sterling” deposit on this map):
http://www.wkmining.com/_resources/projects/hasbrouck/map.jpg
(KOR) Corvus Gold Continues Western Expansion, Drills 24.4 Metres @ 3.1 g/t Mother Lode Project, Nevada
May 24, 2018
https://ceo.ca/@nasdaq/corvus-gold-continues-western-expansion-drills-244
It is interesting how investors are so stoked on the Corvus results of 24.4 m of 3.1 g/t gold but shrugged off the West Kirkland result of 43 m of 3.4 g/t gold.
WKM also already has their mills in place. Seems like a big disconnect between the two companies but part of it visibility on WKM where a number of different newsletter writers are fawning over Corvus & Northern Empire.
Just an observation on unrealized value in West Kirkland, where KOR & NM have gotten a bit far ahead of themselves.
Scorpio has depleted their resources, but still have tons of shallow open pit targets peppered all over their property and 2 mills in place. They have been left for dead though, and they are in desperate need of a financial raise and capital injection so they can build a larger plant/heap leach combo, rework their debt, and give it another round this metals cycle.
I did very well with trading SGN in the past, but held onto my core position too long and have washed out all the gains I had taking a loss on it. My plan is to watch for the refinancing news and see how bad the dilution is after their restructuring. They’ll likely blow out the shares and then roll them back, so I want to see where the dust settles before having another go at it.
I’m guessing Gold Corp is alluding to NM & KOR as far as Nevada goes, but then again, maybe they’ll go after the Rye Patch Florida Canyon/Lincoln Hill/Wilco assets after Alio Gold finishes absorbing them over the next few months. (?)
Then again, it may make more sense if Coeur Mining acquired (ALO) Alio Gold (once they get finished swallowing up the RPM Rye Patch assets in Nevada).
CDE Coeur could have a Nevada district if they combined their Rochester mine with Alio/Rye Patch’s Florida Canyon mine, Lincoln Hill, and Wilco.
map showing proximity of Rochester to Florida Canyon and other assets:
http://4.bp.blogspot.com/-JuUAlbu5caY/VXSB6YkviCI/AAAAAAAAIUc/BbZoJKXmzuk/s1600/r1.jpg
sorry, meant to post this map of couer’s Rochester relative to Rye Patch’s assets being acquired by Alio:
https://www.caesarsreport.com/wp-content/uploads/Florida-Canyon-Oreana-Gold-Tren.jpg
NEM already has mines in Peru and Nevada, as well as Australia, Africa, etc, so they must have the perfect portfolio.
Gold Fields to set aside acquisitions, sees industry costs rising-CEO
Reuters – May 30, 2018
“South Africa’s Gold Fields is setting aside pursuit of new acquisitions for a year as it focuses on its existing operations and nearby prospects instead, the bullion producer’s chief executive told Reuters late on Tuesday.”
“But Gold Fields plans to hold off on additional acquisitions through at least early next year. “We don’t want to really stretch ourselves,” Holland said in an interview at the International Gold & Silver Symposium in Lima, Peru.”
“The strategy of the company now is more focused on organic brownfields, near-mine growth, in and around where we are,” Holland said.
(SGN) Scorpio Gold Reports Financial Results for First Quarter of 2018
May 29, 2018
“Scorpio Gold holds a 70% interest in the Mineral Ridge gold mining operation located in Esmeralda County, Nevada with joint venture partner Elevon, LLC (30%). Mineral Ridge is a conventional open pit mining and heap leach operation. Mining at Mineral Ridge was suspended in November 2017; however, the Company continues to generate limited revenues from residual but diminishing recoveries from the leach pads. Scorpio Gold also holds a 100% interest in the advanced exploration-stage Goldwedge property in Manhattan, Nevada with a fully permitted underground mine and 400 ton per day mill facility. The Goldwedge mill facility has been placed on a care and maintenance basis and can be restarted immediately when needed.”
* Outlook
“The Company’s main focus is to raise sufficient financing to improve its financial position and to re-finance its long-term debt obligations and as such allow it to proceed with the construction of a new processing facility at Mineral Ridge with a view to process heap leach materials and additional open-pit mineral reserves.”
https://ceo.ca/@nasdaq/scorpio-gold-reports-financial-results-for-first-quarter