I bot. GG from $39.25 down and with swing trades brought my avg. cost below $35.00. If I thought GG was a deal <40 (all because of lower grade going through than previously estimated! Jeeez!) Is there a better bargain that I should take my small present profit and invest with a stronger rational basis than Goldcorp? I could only sit and watch amazed while investors were pitching an international mining concern merely because of a common occurance in hard rock mining. Lower grade in the last three months, BFD!
Two things Goldcorp has going for it: A heck of a lot of gold, and indigestion. Telfer built his gold empire, all from three ancient silver mines in Central Mexico. I bot. WHT because $12m in the first year's budget was to stabilize old tailings in the canyon below, some from the 15th C. and then the rest is history.
Well, I personally wouldn't put money into GG but I think that is because I have different goals than you do. So, I wouldn't put much weight on my opinion, if I were you, because of that. The things that make them undesirable, from my point of view, might be things that make them very desirable to someone else. Here's the things that concern me about GG. 1 They focus on polymetallic deposits more than I like. I expect a very bad outcome for the world economy, like depression city for an extended period of time. Copper is a great product now but what happens to the polymetallic mines if a big crash comes? 2 - I think marginal jurisdictions like the Dominican Republic, Argentina, etc. are going to be very, very tempted to nationalize company assets in the environment I see coming. I also think that can happen in the US due to the insolvency issues I see coming which would threaten Marigold and Wharf.
But, like I said I have different goals. The only reason I'm investing in miners at all is as a hedge for a very specific set of outcomes that I think are relatively likely. Specifically, a world wide liquidity crash. Unless someone thinks that is a likely outcome I have a hard time imagining they would have the same goals that I do. But, those are the reasons that I wouldn't invest in any miner who was heavily exposed to marginal jurisdictions or who is heavily weighted toward polymetallic deposits. I love Alexco for instance but don't own any, even at these prices, because of their dependence on lead and zinc in their revenues.
If I didn't think the outcome I expect were likely, I'd think GG would be a steal at these prices.
Naturally if you consider a nation as "marginal jurisdictions" you wouldn't want to mine there, but that wasn't quite what I wanted to know. It makes sense to me, and is something I consider always. But the question about "polymetallic miners" is difficult for me to understand. If a ore is worth digging out for it's gold, then the copper is just extra. Now I realize that the copper will show up as a cash cow in good times, but you need to understand that THAT copper will be the ONLY copper for sale. What that means is that although the contribution from copper to the bottom line will be smaller in hard times, it will still be additional income for the company. The strict copper mines will lay off and go on C&M. The marginal performing mines will shut down, and the copper that is sold will be from gold mines. So what price do you think it would take for copper to fall to shut down the giant copper mines in Chile, because that is what Goldcorp will get for theirs. If it's half of last years price, the loss of revenue to a gold giant like Goldcorp. is still less important than the 25% undervalued price I think the stock is worth today.
Quite frankly I don't see things getting as bad as you fear for a much longer time span than that I will be owning the Goldcorp. I just thought it was a great opportunity to take advantage of those idiots who through their shares away for a drop in production from a non-accident circumstance. How stupid! Hard rock mining ain't like running a factory in China making widgets. Market share ain't our biggest concern, and if you fear unrest then those who dig gold from the ground will be protected as never before. No one wants the mining to stop. Everybody wants that gold to come up.
Actually, I don't think Europe will precipitate the liquidity crash. At least not unless Italy goes down. I think that if there is a liquidity crash it will be precipitated out of China. There's been a couple of decades of corruption fueling "growth" there that is to my mind illusory. Vast tracts of developed property sitting empty, etc. and the loans for them are sitting unserviced on bank's books.