Major gold producers, such as Goldcorp Inc. (GG), are devising strategies to compete with gold ETFs as gold prices continue to rise, even as production costs increase and resource nationalism reemerges, says Charles A. Jeannes, President and CEO of the world’s second-largest gold producer by market capitalization.
“The longer the gold price stays up, the more people will be comfortable with it and will assign a higher long-term value to gold when looking at the value of our company. So I’m actually quite bullish about the performance going forward of our stock price relative to the gold price,” Jeannes said.
Jeannes said Goldcorp is growing production by 70% over the next five years, and he said the company’s joint venture with Barrick in Pueblo Viejo in the Dominican Republic will come online in mid-2012, while the Cerro Negro mine in Argentina is expected to produce in 2013. Goldcorp is also paying shareholders a dividend.
“There was an announcement this morning, another 32% increase to $0.045 a month, or $0.54 a year. So we’ve had three increases over the last, just over a year, and I’m quite pleased with the fact that we’ve got the best growth profile in the business, but we’re also able to increase cash going back to our shareholders,” Jeannes said.
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