Gold Miners Must Be Ambivalent To Gold Price Jumps - CEO
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(Kitco News) - One successful approach to structuring a mining business is being "ambivalent" to gold price moves, said B2Gold CEO Clive Johnson.
“Our approach is that we will never acquire anything that requires a higher gold price and/or exploration success to justify the purchase price,” Johnson told Kitco News on the sidelines of the BMO Global Metals & Mining Conference. “We have the luxury to be ambivalent about the gold prices.”
Mining is cyclical and a good CEO needs to look for opportunities that are profitable without taking on too much, said Johnson.
“I’ve never been a gold bug, I’ve never believed that gold has to go higher, because I think that as a CEO of a gold mining company that would be a dangerous thing, because you could potentially do a deal that wasn’t great because you’re thinking gold’s going to save your butt by going higher. We live in a real world,” he explained.
Another key to success in mining is accountability, Johnson pointed out.
“At the end of the day it is about accountability. And that’s sadly one of the things lacking in the gold space,” he said. “What we bring to each country is an extension of Canadian culture. We treat people with fairness, respect and transparency around the world. But, ultimately it is about accountability. One of the key driving forces for us has been on delivering the promises we make.”
When discussing the recent reports of potential Barrick-Newmont merger, Johnson admitted to being excited.
“I’m a fan of gold moves. What we need in our industry is more success stories. At the end of that day, we need to have growth that increases profitability. It is going to be fascinating to watch these two giants square off,” he said.
B2Gold had a lot of success during the last decade, with Johnson highlighting impressive growth.
“We had a very successful growth of over ten years’ dramatic production growth since we founded B2Gold eleven years ago,” he stated. “Now we have five gold mines in production in four countries and we are right below one million ounce a year level. It’s been a time of dramatic growth over several years.”