Rob McEwen is paid $1 a year, doesn’t receive bonuses, yet his financial success is tied more closely to his company than any other mining chief executive in Canada.
Now the largest shareholder in $1.69-billion McEwen Mining Inc. is betting his gold producer and other smaller competitors will reap more gains from the next commodities upswing than debt-laden behemoths dominating the industry.
“The seniors have blown themselves out of the water,” the former CEO and founder of Goldcorp Inc. said in an interview in Vancouver. “They’re just going to be ships rising in the tide. It’s going to be the intermediate and juniors who have the big runs in this cycle, and that’s where I want to be.”
That trend has already begun. Gold companies listed on the Venture and Toronto Stock Exchange with a market value of less than $2-billion have climbed on average 247 per cent this year, while their larger peers are up 125 per cent, according to data compiled by Bloomberg.
The surge follows a rough patch for global miners. Large materials producers took on debt to expand and feed Chinese demand before the price of raw materials plunged. That forced giants from Anglo American PLC to Freeport-McMoRan Inc. to sell assets and slash capital spending. Smaller miners, which tend to be explorers that look to be financed or acquired by bigger companies, have been among the hardest hit, many struggling to survive without the deep pockets needed to wait out the slump.
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