Goldcorp's performance tarnished by accusations in Central America at AGM


Brenda Bouw, The Canadian Press-

Date of publication: 
22 May 2009

VANCOUVER, B.C. – Goldcorp Inc.‘s (TSX:G) glittering performance in the current economic downturn was tarnished Friday by accusations that its mines are harming the surrounding communities in Central America.

At the company’s annual meeting Friday, community leaders and residents from communities near Goldcorp operations in Honduras and Guatemala lined up to complain about health and environmental risks of their operations.

Goldcorp president and CEO Charles Jeannes, who welcomed the questions, said the company has done work to determine possible connections between their mines and health issues such as skin lesions and rashes.

“I do feel comfortable that our operations are not creating adverse health impacts,” he told the packed ballroom at a downtown Vancouver hotel.

Jeannes said in reaction to the questions that there are different views about mining.

“Mining is very impactful. We dig big holes in the ground and we bring a lot of people and trucks and business into an area, in some cases, like in Guatemala that didn’t have it before,” he said.

“We focus very hard on trying to make sure that those impacts are positive and that the negative impacts are mitigated. None of us are here saying we are perfect and that there is nothing more being done.”

Jeannes, who took the job at the start of the year, offered to sit down with groups to discuss possible negative community impacts. He said the offer has been made in the past, but rebuffed.

Others took to the microphone to say the company doesn’t have proper approvals in some of its locations, though Jeannes said that they did receive government approvals in places such as Guatemala, for example.

“We do believe we have consent of the majority in the communities where we operate,” he said.

Goldcorp operates the Marlin mine in Guatemala, which began commercial production in late 2005.

Since 2007, the company has been closing its activities at the San Martin mine in Honduras. Goldcorp said it will cede the land to the San Martin Foundation for commercial agricultural projects.

Vancouver-based Goldcorp recently reported a 27 per cent rise in profit in the first quarter to US$290.9 million as the price of gold, considered a safe haven in an recession, continued to rise

The quarterly profit amounted to 40 cents per share for the January-March period and compared to US$229.5 or 32 cents per share for the same period last year. The company reports in U.S. dollars.

It said an increase in gold revenues offset the decrease in silver and copper revenue, while expenses remained the same.

Revenues fell slightly to $624.8 million compared to $626.7 million.

Goldcorp expects to produce 2.3 million ounces of gold this year at a total cash cost of approximately $365 per ounce on a by-product basis and $400 per ounce on a co-product basis. It has a goal to grow the company by 50 per cent within five years.

In Canada, Goldcorp operates the flagship Red Lake mine as well as the Porcupine and Musselwhite projects. It also has operations in the U.S., as well as Central and South America.

Its development projects include the Eleonore gold project in Quebec, and projects in Mexico and the Dominican Republic.