SouthAfrican news is a watershed negative signal to gold sector
it is a very serious minor wet blanket
but it is felt now, and will become more so
a major league deterrant to the entire group of SA mining stocks
I consider it to likely cut SA miners by 30-40% relative to their competition
saying it is IRRELEVANT is like telling someone who has been given a DEATH SENTENCE that one week later, it is old news
or telling some guy that henceforth, he will now be OBLIGATED TO SUPPORT A FAMILY OF SIX
serious detrimental consequences to SoAfrican mining
lost mgmt control, diversion of exploration funds, cut into profits, higher worker wages, poor opportunity for raising equity capital, eventually lower gold supply
this SA story has IN NO WAY been fully thought thru, analyzed
in April, I repeatedly warned against SoAfrican mining
it just struck sooner than I expected
as money comes out of SA miners, it will probably drag down the rest of the sector
later when this profitaking session ends, I expect money from SA miners will find its way into safer more capitalist nations
e.g. USA, Canada, Australia, NewZealand, Mexico
we will have a premium for miners in safer nations
just like a premium for miners who dont hedge (and potentially kill their golden gooses)
my opinion is still in limbo for South American mining
for all we know, big stock players might be wondering, pondering, reassessing the likelihood of additional foreign mine seizures
I surely am, with Bolivian silver my main concern
/ jim |
