Goldcorp Inc. shareholders have soundly rejected a call for the Vancouver miner to shut down a big mine in Central America amid pressure from critics who say the project is making people sick and hurting the environment.
Ninety per cent of shareholders who sent in their votes before Goldcorp's annual meeting in Toronto on Wednesday defeated a resolution that called on the company to better consult native groups near the Marlin mine in western Guatemala, about 300 kilometres northwest of the country's capital city.
The resolution also said the company should shut down its mining operations not approved by local residents.
The Marlin mine began operating in 2005 and has been a bit of a millstone around Goldcorp's neck ever since.
Activist groups have asked Goldcorp to immediately close the mine until the company can hold a legally binding referendum of the area's residents to gauge support.
However, Goldcorp president and CEO Chuck Jeannes said the company met all the legal requirements of the Guatemalan government when it consulted with residents before the mine was built.
"We literally took over a year and held thousands of meetings with individuals," he said.
Jeannes added that it doesn't make sense to shut down the mine and put 2,000 people out of work, and said the consultation process is ultimately the government's responsibility, not the company's.
The protests echo similar complaints against Toronto-based Barrick Gold Corp. (TSX:ABX), the world's biggest gold producer, which operates in many countries and has a big presence in Latin America.
After Barrick's annual meeting last month, representatives for natives in the Huasco Valley in Chile held a protest against the gold giant's development in their communities.
The group alleges that Barrick has wrongfully received approval for its Pascua Lama project from the state without permission from the local community, and that the development has subsequently caused environmental damage. The indigenous community has two lawsuits pending against Barrick in Chile.
At the Goldcorp annual meeting, a group of about 30 activists and representatives from the Central American communities where the company operates assembled outside to protest Marlin and other projects in the region.
Residents said people in their communities are suffering from skin rashes, hair loss and high concentrations of heavy metals in their bodies due to pollution from the mine.
But Jeannes vehemently denied this is connected in any way to Goldcorp's operations.
"We know we're not causing any ill health effects," he said in an interview after the meeting, adding that studies commissioned by the company as well as independent studies prove this.
"It has nothing to do with mining, it has nothing to do with our mine, but it is a circumstance that comes from the lack of development.... That's why I think we can be of net benefit to these places, because we bring those kinds of advancements in infrastructure that can actually help people," he added.
"We are looked at as someone who can fix a lot of things that have been wrong for a long time, and it's a tall order. We try to do the best we can, but not everyone is going to be satisfied with our efforts."
Wednesday's meeting followed on the heels of an independent human rights assessment of Marlin, released Monday, which recommended that Goldcorp cease all exploration and expansion activities at the mine until further consultations are held.
Jeannes said the company is already doing that voluntarily.
"We have not done any expansion or exploration in areas where we're not wanted," he said, adding that the company hasn't pursued "some very interesting exploration projects" in the area at the request of one of the local communities.
Talking to reporters after the meeting, Jeannes said Goldcorp continues to look for acquisition opportunities, and will also consider divesting its non-core assets as it sees fit. The company recently sold the Escobal silver deposit in Guatemala to Tahoe Resources Inc., a private company headed by former Goldcorp CEO Kevin McArthur.
Jeannes also said the company will begin generating positive cash flow by the end of the year and could consider upping its dividend once that happens.
"Things can change very quickly as opportunities present themselves," he said. "We may find a great way to spend that money, but we may also find ourselves in a position where we can be both a growth company and pay a higher dividend, and I think that would be fairly unique in our sector and something worth looking at."
In Central America, Goldcorp also owns the Cerro Blanco property in Guatemala and the San Martin mine in Honduras, which is in the process of shutting down. It also continues to hold a 40 per cent stake in Escobal, and has other mines and projects in Canada, the U.S., Mexico, Argentina and Chile.
Shares in Goldcorp lost $1.98 or 4.3 per cent to $44.11 amid a broader decline in the gold sector Wednesday on the Toronto Stock Exchange.