Ian Telfer is the proud father of a spanking new $2 billion gold mine named Eleonore. Perched near the rocky shore of James Bay, 500 miles north of Montreal, Eleonore might seem like a problem child given the collapse in world gold prices.
But in this unhappy season for gold bugs, Telfer, chairman of Goldcorp Inc., scoffs at suggestions that gold is somehow falling out of fashion. “Yeah right. Just like Tiffany’s,” he says. “For thousands of years people have wanted to own gold.”
For the moment, the market is far less enthusiastic. Since 2011, gold has generally headed in one direction: down. The price has fallen from a high of more than $1,900 an ounce to around $1,100 and, in the process, lost at least some of its vaunted status as the ultimate safe haven investment.
On an inaugural visit to Eleonore, Telfer is unbowed. While other miners respond to the downturn by selling assets and seeking partners to offset risk, Goldcorp is presiding over a major expansion that includes this mine north of Canada’s 52nd parallel, another in Mexico and one in Argentina — three multibillion-dollar projects in five years.
“I’ve been in the gold business for 35 years. It goes up and it goes down. But it always goes back up,” he says.
If Telfer is right, he stands to repeat the success he had 15 years ago when he doubled down while gold was languishing at $300 an ounce. If he’s wrong, Goldcorp’s capacity to expand beyond Eleonore and its well-earned reputation for acuity will take a hit.
Eleonore, whose name derives from nearby Ell Lake and the French word for gold, already enjoys a special place in the chairman’s heart. Telfer, 69, speaks of the “absolute thrill” of opening his first mine in his home country. Its ore body is so large the company says it “hasn’t found the bottom of the deposit” yet.
Its northern location comes with intriguing challenges, such as what to do when the propane needed to warm the air underground freezes during cold snaps? (“Keep enough indoors so you can survive until it passes,” Telfer states.)
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