Legend of the Goldcorp ChallengeWed, 10/21/2015 - 19:21
Although Goldcorp now stands as a giant of the global gold industry, it took a healthy dose of chutzpah to reach that position. In the early 2000s, Goldcorp was going through a rough patch, troubled by strikes, lingering debts, and unsustainably high production costs. When the deposits at the company’s flagship Red Lake mine in Ontario were running dry, then-CEO Rob McEwen published all the geological data on the Red Lake property online and challenged the world’s geologists to find him gold. He made available a total of US$575,000, with a top award of US$105,000, to participants who submitted the best models, methods, and estimates. Convinced by the fact that highgrade ore still ran through parts of the 55,000 acre Red Lake stake, McEwen risked exposure to a hostile takeover from its peers in the gold space. Through this tactic, McEwen was able to tap into the minds of thousands of geologists he did not have access to in Ontario. After breaking the first rule in mining of not sharing precious geological data, more than 1,400 scientists, engineers, and geologists from 50 countries downloaded the company’s data to process it and find a few million ounces of gold for Goldcorp. After the results came in, the company drilled four of the winners’ top five targets and hit gold on all four, proving that the future of mining relied on data analysis and technology. By 2001, the Red Lake mine was producing 504,000oz at US$59 per ounce, compared to the 53,000oz it was producing in 1996 at US$360 per ounce. Moreover, since the Goldcorp Challenge was initiated, more than 8 million ounces of gold have been found at Red Lake.
Today, Goldcorp is the largest gold producer in the world with ten operating mines in Canada, the US, Mexico, Guatemala, Argentina, Dominican Republic, and Honduras.