RACHELLE YOUNGLAI
RTGAM






Goldcorp Inc.'s quest for new mines is a matter of survival, according to the company's chairman.

"The only way mining companies can grow is through acquisitions and the only way they can survive is through acquisitions. Sometimes, I'm not sure people outside the mining business appreciate that," Ian Telfer said in a recent interview.

"You have to keep buying stuff or you shrink … When you get to the size that we are, you have to buy things that are considerable sized and the opportunities are limited," he said.

Last week, the Vancouver-based company made a half-a-billion dollar all-stock offer for Probe Mines Ltd. for its gold property in Ontario. The site is near Goldcorp's mine in Timmins, Ont., which will allow the company to use its existing operations to develop the mine. Finding cheaper ways to dig up metal has become every miner's mission amid persistently weak commodity prices. Goldcorp enjoys the status of being the biggest gold miner by market capitalization, while producing less than the world's two biggest producers, Barrick Gold Corp. and Newmont Mining Corp. It has a healthy balance sheet and is one of the few gold miners that can use its shares for acquisitions.

Last year, the company tried to buy Osisko for its mine in Quebec, but threw in the towel after two rivals mounted a higher offer of $3.9-billion.

"Could we have outbid anybody? Uh, yes. But we didn't," said Mr. Telfer. "Sometimes there are people who are more desperate than you, and they will pay a higher price."

One of Goldcorp's advantages was the potential cost saving from combining Osisko with Goldcorp's project in Quebec.

The Canadian miner owns 13 mines in North and South America, including four in Canada.

"Up to now we have restricted ourselves to North and South America," said Mr. Telfer. "But because of our size and the type of opportunities that we would be interested in, we are open to looking beyond the Americas.

Mr. Telfer, who was recently inducted into the Canadian Mining Hall of Fame, said Goldcorp has no plans to diversify into other metals as Barrick did with copper.

"You've got to understand, copper shares are bought by optimists, gold shares are bought by pessimists, and if you mix those two up, neither one of them is going to buy it," said Mr. Telfer.

Barrick's stock was pummelled when it bought a copper miner in 2011. Other base-metal miners, such as BHP Billiton and Anglo American, have recently sold their gold properties.