In-depth interview: Barrick’s Dushnisky and Goldcorp’s Garofalo on gold mining’s future (Northern Miner – June 11, 2017)

At the Canadian Mining Symposium hosted by The Northern Miner at Canada House in London in early May, session moderator Greg Huffman, managing director and global head of mining sales at Canaccord Genuity, sat down with Barrick Gold (TSX: ABX; NYSE: ABX) president Kelvin Dushnisky and Goldcorp (TSX: G; NYSE: GG) CEO David Garofalo for an in-depth conversation on the strategies they use to guide both companies, plus a wider look at what the future holds for gold mining globally. The following is an edited transcript of the exchange.

Question: Looking at some of Goldcorp’s latest acquisitions such Gold Eagle, Virginia, Probe and Kaminak, is there now a premium on assets in safer jurisdictions, given the current political turmoil worldwide?

DAVID GAROFALO: It’s always been fundamental to Goldcorp’s strategy to stay in low political-risk jurisdictions — generally, investment-grade countries with the notable exception of taking a bit more risk in investing in Argentina prior to the Macri regime. But that was a generational asset in Cerro Negro, and it’s been born out in the changing regime there and the Macri economic model.

Fundamental to our story is that we’re predominantly focused on the Americas and our own time zones. It makes it an eminently more manageable company.

In my 27-year career I’ve worked with mining companies that are spread out across multiple jurisdictions on multiple continents, and it does introduce an element of risk and complexity to managing assets that makes it difficult to run the company, and certainly requires a risk premium associated with operating across too many jurisdictions.

One of the reasons Goldcorp historically has gotten a reasonably good multiple is because of its very stringent geographical and geological focus.

Q. Barrick has operations in many more countries. How, in terms of the decentralization of the company, how have you been able to structure that to deal with the increased complexity of jurisdictions and the risks associated with that?

KELVIN DUSHNISKY: In 2016, 70% of our production was from our five core mines in the Americas: Goldstrike, Cortez, Pueblo Viejo where we’re partnered with Goldcorp, Lagunas Norte and Veladero. And that represents about 50% of our reserves.

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