The First Coin to Stash in Your Pot of Gold

I own more than 100 mining stocks. I expect that will sound entirely excessive to many of you, but it's an investment strategy that I've executed with great care and considerable deliberation over the course of the past several years.

I have no intention of abandoning this "basket" approach to my metals allocation, but sometimes it's fun to play with hypotheticals. Today, I asked myself which gold stock I would hold if I could only hold one, and it may surprise my readers to learn that major miner Goldcorp (NYS: GG) leapt clear to the top of the list. Although a strong case could instead be made for an alluring ETF vehicle like my top ETF selection for 2012 -- Global X Silver Miners ETF (NYS: SIL) -- Goldcorp's peer-crunching growth outlook and industry-leading cost structure secure its designation as one of the clearest must-own stocks in the precious metals patch. The stock remains a long-standing staple of my Motley Fool CAPS portfolio.

CEO Chuck Jeannes summarized yet another masterful year of operational performance in his typically understated manner, stating: "Strong, low-cost gold production and another year of gold reserve growth provided a great finish to another solid year for Goldcorp." Solid indeed! Goldcorp rode a 43% surge in revenue to a phenomenal 70% increase in adjusted net earnings. Thanks to enormous by-product credits, Goldcorp delivered its output of 2.5 million ounces of gold at a cost of just $223 each!

Goldcorp continues to execute to plan on its bid to achieve a 70% growth spurt and reach 4.2 million ounces by 2016, and now characterizes that target as "a very achievable path." The world-class Penasquito mine continues to ramp up smoothly toward full production, adding major silver by-product credits even after fulfilling Silver Wheaton's (NYS: SLW) 25% share of silver output. The Pueblo Viejo joint venture with Barrick Gold (NYS: ABX) remains on track for first production later this year, with about 85,000 ounces of gold attributable to Goldcorp anticipated before year-end. While rival Kinross Gold (NYS: KGC) opted to apply the brakes to its growth strategy (partly) in response to acute cost pressures impacting the industry at large, Goldcorp's treasure map to 4.2 million ounces of annual production has never been easier to read.

And even as production expands, Goldcorp continues to comfortably replace reserves each year while achieving net additions to reserve ounces at an astonishingly low cost of just $14 per ounce for 2011. That organic reserve growth outlook formed a key rationale behind my selection of Goldcorp as my No. 4 pick for 2012, but that rank was conceived within the framework of a presumed basket of gold stocks to build an allocation. If I had to select just one, I want the one with the $1.5 billion cash treasury, the $2 billion credit facility, the proven management team of masterful dealmakers, and the most attractive portfolio of existing and developing assets in the industry. If I could own only one, I would have to own Goldcorp.

At the time this article was published Fool contributorChristopher Barkercan be foundblogging activelyand acting Foolishly within the CAPS community under the usernameTMFSinchiruna. Hetweets. He owns shares of Goldcorp, Kinross Gold, and Silver Wheaton.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

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