Goldcorp’s Rob McEwen eyes the exits

Citing the ever-increasing rigours of governmental and regulatory compliance, Goldcorp (G-T) CEO Robert McEwen plans to vacate the helm of the company he has led for 18 years.

McEwen, 54, has asked the company’s board to begin the search for his successor. He calls his departure a “logical progression in our senior management development to accelerate our growth.”

During his tenure, McEwen transformed Goldcorp from a holding company into a $2.5-billion mid-tier gold producer, mostly on the back of the Red Lake discovery in northwestern Ontario.

McEwen faced some heat late last year after the company sold off its gold hoard, while maintaining that gold prices were on the rise; soon thereafter, he personally sold some 5.5 million Goldcorp shares, or about half his holdings. The company’s issue has had about a third of its value trimmed since then. McEwen says he plans to retain his remaining shares in the company.

More recently, the company has begun to rebuild its bullion stash. By the end of June, it had 117,737 oz., including 45,021 oz. deposited during the latest quarter. The company plans to withhold a third of its quarterly production during the balance of the year.

At the end of the three months ended June 30, Goldcorp’s war chest contained cash and equivalents totalling US$302.9 million, gold bullion with a market value of US$46.6 million, and marketable securities worth US$31 million. The company remains debt-free.

Also, Goldcorp has been on a shopping spree that has seen it take up stakes in a variety of junior explorers, including White Knight Resources (WKR-V) and Guyana Goldfields (GUY-T).

Still, the company’s only significant producing asset remains the high-grade Red Lake gold mine, which is in the midst of a US$90-million expansion. In April, the company’s chief operating officer, Bruce Humphrey, and corporate development executive, Chris Bradbrook, quit over a difference of opinion of how the company should grow.

McEwen plans to step down once a replacement is found but has offered to remain for a time as chairman. The company has retained an executive search firm to help it in its quest. Market-watchers have already tapped two possible replacements: deposed Barrick Gold (ABX-T) CEO Randall Oliphant and Joseph Conway, who will leave his post as Iamgold’s (IMG-T) CEO after the completion of a merger with South Africa’s Gold Fields (GFI-N) later this year. Others suspect the company could be placed on the auction block.