TORONTO – Goldcorp shareholders have defeated a resolution calling on the company to explicitly outline how it will consult with indigenous communities affected by its mining operations in Guatemala.

Shareholders who sent in their votes before the gold miner’s annual meeting in Toronto on Wednesday voted 90 per cent against the resolution, which also recommended that Goldcorp cease all operations, expansion and exploration in areas where the state hasn’t received the consent of local communities.

At particular issue is the company’s Marlin mine in Guatemala, which began operating in 2005 and has been a bit of a millstone around Goldcorp’s neck ever since.

Activist groups have asked the company to immediately cease operations at the mine because it didn’t hold a legally binding referendum of the area’s residents to gauge support.

However, Goldcorp president and CEO Chuck Jeannes said Wednesday the company met all the legal requirements of the Guatemalan government when it consulted with residents before the mine was built.

“We literally took over a year and held thousands of meetings with individuals,” he said.

Jeannes added that it doesn’t make sense to shut down the mine and put 2,000 people out of work, and said the consultation process is ultimately the government’s responsibility, not the company’s.

A group of about 30 activists and representatives from the Central American communities where Goldcorp operates assembled outside the annual meeting to protest Marlin and other projects in the region. They raised environmental and health concerns, and said Goldcorp has failed to address people’s fears that its mines are making them sick.

Jeannes vehemently denied this.

“We know we’re not causing any ill health effects,” he said in an interview after the meeting, adding that studies commissioned by the company as well as independent studies prove this.

“It has nothing to do with mining, it has nothing to do with our mine, but it is a circumstance that comes from the lack of development…. That’s why I think we can be of net benefit to these places, because we bring those kinds of advancements in infrastructure that can actually help people,” he added.

“We are looked at as someone who can fix a lot of things that have been wrong for a long time, and it’s a tall order. We try to do the best we can, but not everyone is going to be satisfied with our efforts.”

Wednesday’s meeting followed on the heels of an independent human rights assessment of Marlin, released Monday, which recommended that Goldcorp cease all exploration and expansion activities at the mine until further consultations are held.

Jeannes said the company is already doing that voluntarily.

“We have not done any expansion or exploration in areas where we’re not wanted,” he said, adding that the company hasn’t pursued “some very interesting exploration projects” in the area at the request of one of the local communities.

Talking to reporters after the meeting, Jeannes said Goldcorp continues to look for acquisition opportunities, and will also consider divesting its non-core assets as it sees fit. The company recently sold the Escobal silver deposit in Guatemala to Tahoe Resources Inc., a private company headed by former Goldcorp CEO Kevin McArthur.

Jeannes also said the company will begin generating positive cash flow by the end of 2010 and could consider upping its dividend once that happens.

“Things can change very quickly as opportunities present themselves,” he said. “We may find a great way to spend that money, but we may also find ourselves in a position where we can be both a growth company and pay a higher dividend, and I think that would be fairly unique in our sector and something worth looking at.”

Shares in Goldcorp lost $2.05 or 4.5 per cent to $44.04 amid a broader decline in the gold sector Wednesday on the Toronto Stock Exchange.