Rob McEwen: Explosive Moves are Ahead for this Gold Bull Market
Rob explains his rather unconventional entrance into mining. He felt that combining his fund with the mining business could bring an excellent return. He ended up purchasing two companies through a takeover bid, which later became a string of companies. Eventually, this led to the creation of Goldcorp and the exploration of Red Lake, which became a significant gold discovery.
Having come from the investment community into the mining industry was like stepping into a bath of quick-drying cement. Company employees were not open to new ideas and were not flexible, and he had to work to change the mindset of everyone.
He ended up having trouble convincing the union to adopt these new ideas, and they went on strike. The strike ended up lasting for 48 months, and during that time they modernized the mill and the mine shafts. During this period he received numerous threats and a lot of doubt and skepticism.
Eventually, his most prominent critics became his investors. When the mine finally came back, online production increased from 50k ounces a year to 500k. Meanwhile, their costs to produce an ounce of gold dropped from $360 an ounce to $60. This was a sixty-fold change in economics. He says, “For the last 13 years of running the company, it grew by a compound annual growth rate of 31%.”
He feels we are half way through a bull market in gold that started in 2016. The broad market doesn’t recognize that fact. We need to see more mergers and acquisitions, along with more media coverage. Relative to 72 different world currencies gold has been rising, and gold could move quite sharply when the US dollar falters.
Time Stamp References:
1:00 – Building a gold company.
2:00 – Beginning of Goldcorp.
3:00 – Labor troubles and renovations.
5:00 – Massive production improvements.
7:00 – Gold segment ignored by public and media.
9:30 – Time to put some money into gold.
10:00 – McEwen Mining activities.
12:30 – Not taking a salary.
13:15 – Regulators and accounting conventions.
Talking Points From This Week’s Episode
• Rob outlines his mining career.
• It’s time to rotate some of your money into gold.
• We are halfway through the gold bull market.
• The most explosive moves happen in the next half.
• The economic reasons for holding gold persists.
Rob McEwen is the Chairman and Chief Owner of McEwen Mining Inc. He is the founder and former Chairman and CEO of Goldcorp Inc., which is one of the largest gold producers in the world. In 1990, Rob jumped from the investment industry into the mining industry. By 1993, he had begun a consolidation of five companies that would take eight years to complete. The resultant company was Goldcorp Inc., which has become a gold mining powerhouse. During the last thirteen years of Rob being Goldcorp’s CEO, the company’s market capitalization grew from $50 million to over $8 billion, and its share price grew at a compound annual rate of 31%.
Rob is a passionate innovator, marketer, and an avid recreational competitor. He is also a member of the Dean’s Advisory Board, Schulich School of Business; X Prize Foundation: Vision Circle and Board of Trustees; Global Advisory Council; ISSCR (International Society of Stem Cell Research); CEO (Chief Executive Organization) and WPO (World Presidents’ Organization).
Rob was awarded the Order of Canada in 2007 and the Queen Elizabeth’s Diamond Jubilee Award in 2013. He holds an Honorary Doctor of Laws and an MBA from York University and a BA from the University of Western Ontario. Also, he received the 2001 PDAC Developer of the Year Award, was inducted into The Canadian Mining Hall of Fame in 2017 and won the 2018 Bryden Alumni Award for Outstanding Contribution.