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David Garofalo has poured more than a million dollars of his own money into his company’s stock in recent months. For the time being, that is not a winning investment for the chief executive of Goldcorp Inc. Shares of the Vancouver-based gold miner have slid from above $26 in early July to below $20 as the company’s earnings have generally disappointed analysts’ expectations and its gold production has declined from levels of a year earlier.
But Mr. Garofalo, who took over as Goldcorp’s chief executive at the end of February, shrugs off the market’s less-than-enthusiastic reaction. Investors, he suggests, should get used to the idea of focusing on quality rather than quantity when it comes to judging precious-metal investments.
“If investors are uncomfortable with a smaller gold company, just generally speaking you’re going to have difficulty investing in the space at all,” he says. “The industry is shrinking, and necessarily so” because of a lack of good geological prospects. “So it has to focus on profitability.”
In his first few months on the job, Mr. Garofalo has shaken up Goldcorp’s senior executive ranks and replaced most of the company’s mine managers. But as gold prices have surged this year, Goldcorp’s share price gains have lagged far behind its peers in the sector.
The company announced this week that it made $59-million in the third quarter, an improvement from a loss of $192-million a year earlier. However, the results still fell well short of analysts’ forecasts.
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