As growth plans return at gold miners, are investors being set up for disappointment? – by Ian McGugan (Globe and Mail – February 17, 2017)

Canada’s leading gold companies are once again turning their attention to new projects, as resilient bullion prices and healthier balance sheets fuel guarded optimism.

The shift in emphasis was clear as senior executives discussed earnings reports with analysts on Thursday. A year ago the talk was all about cutting costs, selling assets and expanding free cash flow, but miners are now stressing growth opportunities too.

Agnico Eagle Mines Ltd. said it was planning to invest more than $1.2-billion (U.S.) in two mines in Canada’s North. Goldcorp Inc. reiterated its commitment to expanding its production by 20 per cent over the next five years.

Barrick Gold Corp. warned of potential declines in production but also noted it was in the early stages of evaluating the construction of an underground mine at its long-stalled Pascua-Lama project.

The renewed interest in growth might remind nervous investors of the debacle a decade ago when gold miners spent so lavishly on acquisitions and mine development that most failed to generate any lasting returns for shareholders. But this time around the experience could be much more pleasant for shareholders if miners can combine a growth mandate with a firm grip on expenses.

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