DOME IS DONE
Goldcorp is shutting down its century-old gold mine near Timmins, Ont., amid metals price downturn,
Goldcorp Inc. has announced that it will close its Dome mine near Timmins, Ont. — one of the oldest operating gold mines in North America — amid a crushing metals downturn that has shaved nearly half its share price over the last year.
The century-old mine that is located in one of the most prolific gold regions in Canada will close this summer, affecting 115 employees and 76 contractors, the Vancouver-based miner said in a statement Friday.
It was expected to wind down in the coming years as it ran out of ore. And the mine’s general manager estimated early last year that Dome still had five years of reserves left underground and “lots of life left in it,” according to timminspress.com.
But tough market conditions, which saw the TSX’s gold stock index tumble 45 per cent last year, were likely a factor, said analyst John Ing.
“The gold industry has been hard hit over the last year and for much of the last three years,” Ing said.
Although bullion is considered a safe haven investment when markets tumble, the gold price is basically flat from the end of last year. This is due in part to the strong U.S. dollar, which tends to trade in the opposite direction of the precious metal. Gold now trades just under $1,100 (U.S.) an ounce.
“The gold industry has been hard hit over the last year and for much of the last three years.” JOHN ING ANALYST
“Gold is close to the break-even for all-in costs for a lot of producers,” he noted.
Gold miners are struggling to gain back investors’ confidence with prices of the metal enduring a third straight annual decline last year after a13-year bull market.
Dome mine is in Goldcorp’s historic Porcupine mining district in northern Ontario, near Timmins. Operations at Porcupine’s Hollinger open pit, Hoyle Pond underground mine and the processing plant will continue and “be optimized in order to sustain profitable production, and are expected to continue for the foreseeable future,” the company said in a statement. “The Dome underground has been an important contributor to Porcupine’s overall production, and a significant part of the history of this gold mining district,” said Brendan Zuidema, Goldcorp’s Porcupine mine general manager.
“We will be working with the United Steelworkers Union to close the site safely, responsibly and in accordance with the collective agreement,” he added in a statement.
In 2014, gold production from the Porcupine district totalled 300,000 ounces. Harsh times in the resources industry — which have taken most commodities besides oil to historic lows — have prompted many mine sales, closures and cost-slashing at mining giants worldwide.
Steve Parsons, an analyst at National Bank Financial, said the previous metals downturn in the 1990s was “just brutal, and we’re there, or close to there now.”
Copper also tumbled to its lowest level since mid-2009 on Friday, pressured by a slide in oil prices and further losses in shares and the currency in China, which analysts say is stoking fears about demand for metals in the world’s top consumer of raw materials.