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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Claude Cormier who wrote (19647)3/5/2003 7:39:36 AM
From: que seria  Read Replies (2) of 206092
 
Claude, your question is important to those of us who own
lots of gold stocks and E&P companies.

For sure it is getting harder to find quality gold deposits in Canada, but is it the same for gas?

My sense of this, buying both for the last 20+ years, is:

making oil and (mainly) natural gas less attractive:

--it's easier to locate the oil and gas than gold;
--there's a lot more oil and gas that is readily locatable with present methods than is true of gold, relative to present demand; but...

factors making oil and NG more attractive than gold:

--oil and gas generally deplete faster than gold is mined, so the treadmill effect is/will be even greater in E&P, assuring ongoing demand (actually cuts both ways, depending upon co's deposits, reserve replacement, finding costs);
--oil and gas have far greater inelasticity of demand than gold at present and for the foreseeable future (the key);
--revenue realization and payback is far faster with (successful) oil and gas than with gold exploration;
--gold exploration offers far greater strikeout risk--competent gold explorers far more often fail to find economic deposits than is true of competent E&P companies;

so...

Even for a long-time buyer and present holder of gold stocks such as I, North American natural gas looks like a better play than gold. I bet most of your subscribers are already well into energy plays.
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