Ray,
I agree, we as investors need to look at not only the potential size
of a gold deposit but especially the economics of recoverying that gold.
Whether it be political, geological, metallurgical, etc., if we chose
companies/prospects with favourable economics then we should fair OK,
and if the POG goes up, our rewards will be even greater. Peter Lynch
writes an interesting article in this months Worth magazine. Basically
he says chosing a good gold producer is the way to play the gold market.
He mentions Barrick as being one of the lowest cost gold producers which
has hedged its gold sales for the next three years at ~$415US/oz.
It'd be interesting to see how all the other senior and junior producers
compare in terms of cost.
We basically have no idea what will happen to the POG due the way "the
powers that be" can stir things up (or down in this case) at will.
The Swiss annoucement was so contrived and the timing was unbelievable.
Forget technical analysis of gold in the short term. The POG will
rise when insiders manipulate to do so. I think the lowest cost gold
producers are the best bet in the mean time. To speculate further,
an unhedged gold producer should rise dramatically if the POG does
a reversal.
Definitely the proximity of Monetas gold deposit in relation to Barricks
is a huge plus, however, I've heard it said that the geological model
is complex which in layman's terms could mean mining it may be expensive.
Denis, has there been any talk of a feasibility study following the reserves
calculation or am I jumping the gun a little?
Regards
RonS
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