* Goldcorp not to hedge its gold
* Eyes 30 million oz silver output
* No plans for pure base-metal diversification
* M&A deals still possible among majors
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By Martin Roberts
MADRID, May 10 (Reuters) - Goldcorp, the world's fifth largest gold producer, said on Tuesday supply and demand fundamentals showed gold's bull run was not over.
"I certainly think we're in much more the middle than near the end of this long bull run," Chief Executive Chuck Jeannes said in an interview.
"We have limited mine supply -- it has actually declined over the past 10 years -- and very strongly increasing demand world wide, both of the physical metal for jewellery and investment."
Gold prices eased below $1,510 an ounce in Europe on Tuesday as the dollar rose 0.5 percent against the euro on simmering concerns over euro zone debt levels.
Jeannes, speaking by telephone from a Barcelona conference, said that Goldcorp would not be hedging its gold output.
"We are committed to providing full exposure to the gold price to our investors. That's what they're looking for and that's what they'll get," he said.
Goldman Sachs late last year predicted gold would peak at about $1,600 an ounce in 2012 at which point it forecasts the Federal Reserve will begin raising rates, thereby undermining some of the investment appeal for gold.
It recommended producers begin hedging some of their output at this point in anticiation of a gradual price decline in line with a strengthening dollar.
Silver is a by-product of Goldcorp's gold operations and it expects output to reach 30 million oz this year, which Jeannes thought would make the company the world's third-largest producer.
He saw potential upside for silver prices.
"I don't think the silver run has necessarly ended, as would have been indicated by the move last week and the rebound over the past couple of days would support that," he said.
MAY EXCEED OUTPUT TARGETS
Goldcorp expects to produce 2.65-2.75 million oz of gold this year, and 4 million oz by 2015 from mining projects in Canada and Latin America.
Jeannes said Goldcorp could exceed its target if it were later able to include other potential projects in its formal plan, like Noche Buena in Mexico and Cerro Blanco in Guatemala.
In addition to silver, Goldcorp produces copper and zinc as by-products but plans no expansion into base metals.
"Our strategy reains to be a gold-mining company," Jeannes said. "Don't look for us to go diversify into a pure base metal opportunity."
Jeannes saw scope for mergers and acquisitions in the gold sector, but noted that Goldcorp had already been active in recent years.
"I'd actually be surprised if we didn't see a deal or two going forward involving the majors," he said.
"We have the luxury of kind of sitting back and not needing to do anything, but being able to keep our eyes on opportunities and being very selective if we want to move forward. (Additional reporting by Amanda Cooper in London, editing by William Hardy)