Acquisitions are vital for survival, Goldcorp chairman says – by Rachelle Younglai (Globe and Mail – January 26, 2015)

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Goldcorp Inc.’s quest for new mines is a matter of survival, according to the company’s chairman. “The only way mining companies can grow is through acquisitions and the only way they can survive is through acquisitions. Sometimes, I’m not sure people outside the mining business appreciate that,” Ian Telfer said in a recent interview.

“You have to keep buying stuff or you shrink … When you get to the size that we are, you have to buy things that are considerable sized and the opportunities are limited,” he said.

Last week, the Vancouver-based company made a half-a-billion dollar all-stock offer for Probe Mines Ltd. for its gold property in Ontario. The site is near Goldcorp’s mine in Timmins, Ont., which will allow the company to use its existing operations to develop the mine.

Finding cheaper ways to dig up metal has become every miner’s mission amid persistently weak commodity prices. Goldcorp enjoys the status of being the biggest gold miner by market capitalization, while producing less than the world’s two biggest producers, Barrick Gold Corp. and Newmont Mining Corp. It has a healthy balance sheet and is one of the few gold miners that can use its shares for acquisitions.

Last year, the company tried to buy Osisko for its mine in Quebec, but threw in the towel after two rivals mounted a higher offer of $3.9-billion.

“Could we have outbid anybody? Uh, yes. But we didn’t,” said Mr. Telfer. “Sometimes there are people who are more desperate than you, and they will pay a higher price.”

One of Goldcorp’s advantages was the potential cost saving from combining Osisko with Goldcorp’s project in Quebec.

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