It is six in the morning and David Garofalo is driving under a perfectly blue sky. He crosses Lions Gate Bridge, drives through Stanley Park and enters downtown Vancouver, in all its craziness: hobos feeding pigeons, steam rising up from street corners, and mine promoters, mercilessly peddling valueless stock.
Garofalo is the first to arrive at Goldcorp's headquarters, a golden-brown skyscraper surrounded by banks, where he was appointed chief executive in February. He collects the newspapers from the front desk and takes the lift to the top floor, where he is met by a gold carpet. Windows reaching from ceiling to floor frame the sea, the mountains and sky. Sun bounces off a glass staircase and the beech-lined walls.
Garofalo sits down in front of his Bloomberg terminal. He rings his parents in Toronto. His
father is pissed off. Two weeks ago, Garofalo told The Globe & Mail that his father had been a garbage collector in Toronto's North York district. “Dad, they edited it, I told them you rose to superintendent.”
At eight, Garofalo crosses the street and strolls into the Fairmont hotel. Wearing a dark brown suit he sits down in front of a brown wall, ordering fruit and poached eggs, toasted English muffins, plus a triple shot of espresso with skimmed milk. “I have a lot of respect for people that walk away from deals. That's more often than not the right thing to do.”
With nine large mines, quarterly revenue of over $1bn and nearly 15,000 employees, Garofalo is at the top of his tree. He is also sitting on one of the strongest balance sheets in the industry. But Goldcorp has work to do. Almost all
its operations, from Porcupine in Ontario to Cerro Negro in Argentina, have hungry mills. Its mines are not delivering enough ore to keep their plants fully utilised. Gold production has dropped, from 3.5m ounces last year to 1.4m in the first half of 2016.
There are thornier issues. In August, Reuters reported a tailings leak at Goldcorp's Penasquito mine in Mexico. It has been blockaded in recent weeks, with 420 police officers on site. At Goldcorp's Eleonore mine in Quebec, its newest operation, the company only discovered when it was ramping-up the mine that the deposit suffers from folding, or buckled-up geology, making it difficult to mine-out gold veins without processing waste rock.
At the beginning of the year, Goldcorp was the world's largest gold group by market cap, as rivals grappled with debt. But after two tough...