More gold mining partnerships seen as industry eyes growth
By Nicole Mordant
VANCOUVER (Reuters) - More partnership deals are likely in the gold industry as miners start investing in new projects again but are keen to lower the risk, analysts said after Goldcorp Inc and Barrick Gold Corp's announced a 50-50 joint venture in Chile.
The joint venture will work on developing gold mines in northern Chile's Maricunga belt and includes the Cerro Casale project, one of the world's biggest undeveloped deposits.
After five years of painful belt-tightening as the price of gold fell, the industry's biggest companies have started to loosen their purse strings to build mines and find new deposits to replenish falling production and reserves.
But miners remain cautious after Barrick and others suffered high-profile cost blowouts on developments during the last boom.
"The last thing the industry needs is another Sudbury (in northern Ontario), another Nevada, where you are building duplicate infrastructure on the same deposits," Goldcorp Chief Executive Officer David Garofalo said in an interview.
Shares of Goldcorp were down 5.8 percent in midday trading, falling more than other gold stocks as investors remained unsure whether what was likely to be a big capital project would have a high enough rate of return to be built, Gabelli Gold Fund research analyst Chris Mancini said.
Barrick, the largest gold miner, was down 1.7 percent.
Development partnerships could make sense on other big gold projects, such as Seabridge Gold Inc's KSM project in Canada and Northern Dynasty's Pebble deposit in Alaska, Mancini said. Continued...