Those of us who work in the mining sector are probably well-aware of some of the big names in the industry. Names like Eike Batista, Robert Friedland, Lukas Lundin, and Frank Giustra. All mining executives who have not only enjoyed great success in the industry, but who have also seemed to be in the right place at the right time — and then made the most of it.
Chairman of Goldcorp Inc. (NYSE: GG), Ian Telfer, would be another name to add to the list. Ian Telfer has spent more than thirty years in the mining business, building and leading a number of first-rate mining companies, all while experiencing gold’s ebb and flow from bull market to bear to bull again. Perhaps most importantly, Ian, along with his business partner, Frank Giustra, were prescient enough in 2001 to take advantage of the end of a deep gold bear market and the beginning of a gold bull run that lasted the next seven years.
Taking full advantage of this bull market, Ian would go on to form and lead a number of significant mining companies, like Wheaton River Minerals Inc. and Silver Wheaton Corp., and would also lead Goldcorp, first as its President and CEO, then as its Chairman, a role Ian continues to serve to this day.
As we learn when speaking with Ian Telfer, earning this kind of success in a relatively short amount of time takes skill, hard work and a passion for the industry. It also means being in the right place at the right time.
We had the chance to speak with Ian at length about his thoughts on the current gold market and his tips for the younger generation of miners just starting out.
First of all, thank you so much for taking the time to speak with us.
Ian Telfer: Absolutely. It’s my pleasure.
I want to begin by mentioning the current jobless claims in the United States that came out last week. Jobless claims in the United States fell once more in one of the best employment reports to come out in a while. The employment data has reignited talks of interest rates hikes in the United States.
What are your thoughts on this recent economic news? Do you think it will stall a rise in gold prices?
Ian Telfer: Well, certainly positive employment data like this report is great news. More people having the opportunity to work is what counts afterall. However, whether this report will dampen gold prices for the rest of this year — I’m not too sure about that. Putting aside this employment report, I think there’s still plenty of economic uncertainty to go around. That’s not exactly a good thing, but I think that’s one reason why we have seen gold prices rise this year. I don’t see that this employment report has fundamentally changed the amount of uncertainty out there.
Thus far, gold prices this year are up roughly 16 percent. So, you do still see this run-up continuing?
Ian Telfer: In general, I’m always bullish on gold. The fact that the total amount of gold ever mined globally equals roughly 152,000 metric tons, which is enough to fill 60 tractor trailers, gives I think an idea of just how precious this metal is. And if you spend any time working in the gold sector, you’ll see that the number of mines producing a reliable amount of gold is falling. The fact of the matter is that it’s becoming more difficult and more expensive to reach and extract gold.
Gold prices will always face different economic climates and will always have their bear and bull runs. But, that will never discount the fact that gold is a rare commodity that’s been desired for thousands of years and will continue to be desired.
Given this year’s more positive price environment, based on your experience, what advice can you provide juniors? If this is the beginning of a gold bull run, what should they be doing?
Ian Telfer: Well, as bullish as I am about gold, I can’t say whether we’re seeing the beginning of a major bull run. I think there’s a lot of factors that play into a prediction like that. But, I do think this is a better time to be in mining than say a year or two ago.
My biggest point of advice would be to stay out of debt as much as possible. If we are at the beginning of a legitimate upswing in the mining industry, then access to capital will begin to get much easier. But, I would urge juniors to be cautious. A rise in commodity prices never lasts, and you don’t want to be over-leveraged when prices start to fall again.
What kind of guidance can you give to the younger generation of miners who are just entering the mining space?
Ian Telfer: That’s a good question. After thirty some odd years in the business, I think I do have some advice to give. I think there are two points of guidance I’d highlight. I’ve mentioned these before, but I think they always deserve another mention. One, don’t let the fear of failure stop you from taking advantage of a potential opportunity. Second, never forget that opportunity knocks very softly, and I think you have to be attuned to your surroundings, to what’s around you, to hear it.
There’s no doubt that the mining business is full of risks. And I think that sometimes freezes young mining entrepreneurs or those who are new to the mining business. There are a lot of decisions to make, and when you’re first starting out, a lot of those decisions will impact whether you’re still in business the following year. But, with all that said, there is no reward without risk – and that is doubly true for the resource sector.
Second, I think that a lot of entrepreneurs — and this can be said for other industries as well — believe that when there is an opportunity, it presents itself with a big bang and is as clear as day. I’m sure that’s the case sometimes. But, more often than not, opportunity comes in quietly and you have to be so engaged and so in-the-moment to be the first one to hear it.
A last question: Can you provide any details on whether Goldcorp will be planning any new acquisitions this year or if there are any particular mines the company is currently looking at?
Ian Telfer: Well, in response to that question, I can only say that Goldcorp is always looking for new opportunities. We’re very comfortable with our current operations and we look forward to seeing continued results there. But, as always, we strive to be in a position to take take advantage of an opportunity when it presents itself.
Thank you so much, Mr. Telfer.
Ian Telfer: It was my pleasure.