February was a strange month for Vancouver’s Goldcorp Inc., Canada’s largest producer of gold and the company in charge of opening the Éléonore mining project in the Wemindji area.
In early February, Goldcorp chairman Ian Telfer was named as a person being investigated by the Ontario Securities Commission (OSC) with relation to an insider trading scheme.
Between 2007 and 2008, Eda Marie Agueci, a longtime friend of Telfer’s and executive assistant to the chairman of GMP Securities LP, allegedly arranged insider trades for eight friends and acquaintances that resulted in profits of nearly $1-million.
According to the OSC’s documents, Telfer is accused of having advised Agueci about how to keep her security deals secret from her employers, to whom she was required to report all such information to make sure she was following regulatory procedures. Tefler is also accused of having offered Agueci the opportunity to buy shares of a mining company called 222 Pizza Express Corp. in a private share offering, and having advised Agueci to buy the shares in her brother’s name to keep the transaction a secret. 222 Pizza Express Corp. was later renamed Gold Wheaton Inc.
Telfer has responded that he did nothing wrong.
“I do not believe that there is anything wrong with my conduct,” he said in an interview with the Toronto Star. “It is an everyday occurrence in the Canadian business world.”
In its official statement on the matter, Goldcorp itself underlines that “The OSC allegations [against Mr. Telfer] do not involve any conduct related to Goldcorp. Goldcorp has not been contacted by the OSC regarding any aspect of this investigation, nor do we expect to be, as this is a completely separate matter from Ian’s role as Chairman of Goldcorp’s board. Goldcorp has never had any formal or informal business association with Gold Wheaton. Ian has conducted himself with absolute integrity and a deep sense of responsibility to the shareholders of Goldcorp.”
In mid-February, however, Goldcorp also announced that it had achieved record revenues of $5.4-billion in 2011, which reflects the sale of 2,500,000 ounces of gold. The price of gold went up to a record $1,800 an ounce, which enabled the company to reap such great revenues.
In a speech to the Economic Club of Canada only two days after the OSC’s allegations against him were published, Tefler announced that he expected gold prices to reach $2,500 per ounce this year, and $5,000 per ounce within three years.
These rising prices come at a time when Goldcorp is investing in mines around the Americas. Last year, Goldcorp opened the Penasquito mine in Mexico, and is planning for the openings of the Pueblo Viejo mine in the Dominican Republic this year and the Cerro Negro mine in Argentina next year, along with the Cochenour mine in Red Lake, Ontario, and the Éléonore mine in Wemindji in 2014.
Wemindji’s Éléonore mine project, which was given the go-ahead by the Quebec government in November 2011, is expected to be one of the country’s largest underground mines, providing an additional 600,000 ounces of gold per year to Goldcorp (for a gross of $1.08-billion at present-day gold prices).
In January 2011, Wemindji’s Chief and Council backed an agreement of collaboration between Goldcorp and the Grand Council of the Crees (Eeyou Istchee) along with the Cree Regional Authority. The agreement, which was finalized in February 2011, states that “Goldcorp recognizes and respects Cree rights and interests in the area”, and that the Cree Nation “recognize[s] and support[s] Goldcorp’s rights and interests in the development and operation of the project”.
Grand Chief Matthew Coon Come described the agreement as “a vibrant example where, with the participation of the Crees, mining development can take place and prosper in Eeyou Istchee.” He went on to say that the agreement marked “the beginning of a collaborative and fruitful relationship […] based on respect for Cree rights and environmental and economic sustainability.”
Reached by phone at Goldcorp’s Vancouver headquarters, Christine Marks, Goldcorp’s Corporate Communications Manager, said that OSC’s allegations against Tefler should have no impact at all on the community of Wemindji or the development of the Éléonore mine.
“Mr. Telfer has a long history in the business,” Marks said, “with an excellent reputation for upholding the interests of the shareholders at Goldcorp.”
For more info: www.goldcorp.com
