it's ground hog day ..., page-4

"At this point at least, POG has to at least keep pace with oil prices to keep their margins on par......this is a critical ratio to watch."

Since the GFC started in 2008 there has been a step-change higher in the gold-oil ratio, which bodes well for miner profitability (chart below).

Yes, many of the HUI companies have taken over exploration/development projects that require billions of dollars of investment to bring them to production. Kinross needs to spend ~$6b to double production by 2015.

Perhaps this is what the market sees ahead - a fall in gold prices and the need for Barrick et al to raise more equity again. I don't see it happening provided gold holds $US 1350...



http://seekingalpha.com/article/256874-gold-oil-ratio-critical-now

Rowingboat