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Aug 5, 2020

Former Goldcorp boss sees 'quite a bit of runway' for gold prices

Rising Google searches for gold show investor appetite


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One of Canada’s top gold executives says the precious metal still has a long way to go before reaching its peak.

“There’s still quite a bit of runway here,” David Garofalo, the newly-appointed chief executive of Gold Royalty Corp., told BNN Bloomberg Wednesday. “Nobody foresees a restriction of money supply any time soon, given the uncertainty we’re experiencing.”

“Given the vast amounts of debt that have been piled onto government and corporate balance sheets, the governments are just going to try to print their way out of debt. That means gold is going to go up for the foreseeable future.”

Garofalo, who served as president and CEO of Goldcorp Inc. from 2016 through 2019, said the company’s merger with Newmont Mining Corp. last year gave its shareholders a prime opportunity to capitalize on gold’s surge this year.

Spot gold prices hit another record high Wednesday after rallying above US$2,000-per-ounce a day earlier, extending the precious metal’s 2020 gains to nearly 35 per cent.

“Anybody that owned Goldcorp stock at the time we merged with Newmont has seen the value of their underlying investment almost triple, including dividends,” Garofalo said in his first interview with BNN Bloomberg since that deal. “So, we were better able to participate in the gold rally we’ve enjoyed since then, with a much broader portfolio with a deeper balance sheet that Newmont brought to the table as we merged the two entities together.”

Garofalo said he’s aiming to adopt a similar approach in his new role, bringing scale to the royalty business, while navigating inevitable M&A.

“There’s certainly scope for consolidation, given the vast number of new royalty companies that have come into the space over the last year,” he said.

“There will be a rationalization, and what we want to be is a survivor in that environment.”