I know a fellow who started a mining company by maxing out 6 of his credit cards in order to finance it back in the 1980's. Now it has joint ventures with 3 platinum exploring majors and its capitalization is 35 million dollars. In addition there are two other gold mining groups in his stable but they are yet to take off.
I think this gold mining boom is just getting started. The public has slow to react and it has been mainly deep pocket investor and institutionally driven. This latest mini boom since July is just a blip on the graph. Despite the perception of high values, the cap of gold mining and development stocks may triple yet again before we find a market top.
All this market needs is a major area discovery in North America, of gold or copper, as in Kidd Creek or Hemlo and the market will stratespheriate. Both discoveries mentioned supported and increased exploration activity in Canada markedly for seven years following their advent. Hemlo started a whole mining market of its own. Techniques of exploration, people and companies are still going strong from the aftershock of that discovery. IP had never been used widely for gold exploration prior to Hemlo. Now its used for finding the associated disseminated sulphide horizons is routine. Geochemical techniques for gold never came into their own until after the related Mishibishu area exploration focus later in that period.
The even more significant multiple discoveries of the Tintina Trench area of Yukon Alaska, despite the massive staking rushes, never excited the general market the way Hemlo did. In fact the market plays in that area, of potentially staggering gold resources, has been insipid since the late nineties, despite the discovery of the Pogo (Teck Corp, Alaska), arguably the best vein deposit found in North America since Hemlo.
The influx of exploration and development money into the gold areas of the world is beginning. It will continue apace for the next three or four years, gaining strength, until the widespread retail market starts to awaken. If you look at what the majors are doing far afield, it will soon become apparent. Newmont did not consolidate with other interests for nothing. I predict the majors will start increasing exploration staff and ramp up grass roots drives to find more ounces in the near term. This summer should be an exciting exploration season. Gold, diamonds, and base metals will take the forefront with investors everywhere.
Those companies I mentioned at the beginning have had ground in the Tintina Trench for several years. They just started to finance their gold operations at low market cap recently.
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