NCM seemed to have chased the big and low grade deposits in the last 10 years. Didn't seem to mind that some of them are in very difficult countries like PNG, just go for the big low grade deposits, easiest to find, exploration guys look like champs, pays goes up, resource table expands, bonuses given out...ounces at any costs...There is always a time when the chickens come home to roost.
Sure they might have 93 m ozs of resources BUT...at what grade, at what depth and in what country.
Telfer 9 m ozs @ .63 gpt Au, 0.08% Cu and the pits getting a whole lot deeper.
Bonriko 2.7 m ozs @ 1.3 gpt Au..neither super big nor medium grade
then there is Lihir, grade of 2 gpt Au, but not an easy job to mine!
and on we go. Only so many stops you can pull when you have a low grade orebody..and its getting deeper
NCM needs a gold price of $1450 per ounce in 2014 to break even. Gearing at 30%. Good luck NCM shareholders,
But this is part of the physical supply side, and a major part of Australia's physical supply side in gold. Doesnt look good. Boddington? Lets look around the globe a bit...
Lets go to South Africa...Best not, looks decidedly shakey on the ground, and lets not mention underground.
Lets go to Canada, where AngloAmerica just walked away from Pebble Mine in BC, leaving $540m on the table, and Northern Dynasty is going to get the mine up and going!? Cap Inv $4.7b.... pre tax IRR of 14.2 % With NoDirtyGold's permission no doubt. I can see the bankers piling into this. Good luck!
Lets go to Venezuela, nationalisation underway?, so perhaps lets look elsewhere.
In fact we better be very careful about going to any of the Latin American and quite a few Sth Amercian locations for another reason, as the Fraser institute (and others) put these countries on the bottom of the global table in terms of Corruption etc. And of course you know the legislation has become a lot more onerous(US, UK, Canada..and soon Oz) on Directors fully disclosing under the table monetary transfers, and if one is caught, then a jail term is on the menu. Lets not mention the environmental legislative uncertainties in Argentina? Nor Uncertainty concerning the administration, interpretation and enforcement of existing regulations,...LOL
Then theres the ever green "Stans"., plenty of gold there, Murantau, Zarmitan and a lot more to be found no doubt etc.....Where did my wallet go again.
Well lets go to China and look for gold, but they don't sell their gold? Why?
Physical supply side looks very very sick at $1300. In fact it just looks sick. Exploration departments sacked in the big companies. Juniors cannot raise money to explore. Low hanging fruit all picked. Just looks very sick. Full articulation of this is not even in the Sprott news!
Good luck tot he paper shufflers and all those with the printing presses, the chickens will come home, I have no doubt. And it will not be pretty is my bet. I am off to the Perth mint for some physical stuff
