The incoming chief executive of the world’s largest gold miner says he’s confident Newmont Mining will be able to maintain profitable gold production at 6m to 7m ounces a year for “a couple of decades” following its $10bn acquisition of Goldcorp.
Tom Palmer, who is set to replace Gary Goldberg as Newmon CEO later this year following the closure of the deal, said there was an opportunity to find more gold at Goldcorp’s mines in Mexico, Argentina and Canada.
“We see a real value proposition in this acquisition in bringing Newmont’s exploration expertise to bear on these assets,” Mr Palmer told the Financial Times. “We see real opportunity to leverage our technology and expertise in that space.”
Shares in Colorado-based Newmont have fallen 9 per cent since it announced the deal to acquire Vancouver-based Goldcorp last Monday.
Mr Palmer, who previously worked at Rio Tinto, said Newmont had sent its “best and brightest” to do due diligence on Goldcorp’s assets.
Mr Palmer signalled out the potential for adding gold at Goldcorp’s remote Cerro Negro mine in Argentina as well as its Penasquito mine in northern Mexico.
Goldcorp bought Cerro Negro for $3.6bn in 2010 but had to write down the project by $2.3bn in 2015. The mine is located 600 meters above sea level in southern Argentina.
“When we look at Cerro Negro we see the opportunity to bring some of Newmont’s operational expertise to bear, we are quite excited about the exploration around that region,” he said.
In Canada, Goldcorp’s Musselwhite mine below Lake Opapimiskan also has potential, Mr Palmer said. The Musselwhite mine includes some 17,500 hectares of mine claims and leases in the North Cariboo Greenstone belt, according to Goldcorp.
Mr Palmer, currently chief operating officer at Newmont, was recruited by Mr Goldberg to join Newmont in November 2014. They first met when they both worked for Rio Tinto.
Still, Mr Palmer said the miner would not chase growth “for growth’s sake.”
