Chingy, with a gold price on average at USD$1,450 and after one years production of 100,000 oz at an AISC of USD$730 (basically a license to print money), there has never been a gold company with less than at least a 350m market cap, as far as my research can discover. Perhaps it maybe happened back in the gold doom and gloom days of the 1990s, but not in the last 20 years, and I've been watching this space for 30 years. I'm happy to be proven incorrect if you can come up with some research to show otherwise, I can check it for you, IMHO it would be a mighty exception though.
I mean, all things have to go right. And all people look for 10 baggers, but let's be realistic and just look back on the market caps of the 100,000 oz producers over the past 10 years. This should be a fair comparison, although you would also have to take into account the debts of those companies, and their management abilities, mine life, etc... etc... (there are a myriad of factors).
Nothing is a certainly with small cap investing.
Everything is a (significant) gamble.
And you lose some, and you win some - you must accept that, or don't invest.
Left field events occur all the time, some are top-up opportunities, some are sell-and-get-out signals.
It's a wild game my friend, and not for the faint hearted.
If you are young, and you want to accumulate wealth steadily, for yourself and your family over the next 30 years, then IMHO you should do what Aussies have always done, and invest in real estate, because over longer time frames it will never fail you, and is far less risky, and far more certain within those time frames to provide for your family.
Small cap gold stock on the ASX can be nothing more than a throw of the dice, or a spin of the roulette wheel, because it is in the space that is most open to corruption and risk and manipulation, that's why most of the scoundrels feed here and ASIC only catches a very small proportion of them. The banksters and while collar criminals down here. You also need a certain amount of luck to be profitable on a regular basis down here where the bottom-feeders dwell.
If you are young, and have a young family, then quite honestly, I wouldn't be here, unless you have just a few quid as a play account.
And yes, there will be a consolidation at some stage, as there should be, on a 10 for one, or even a 12.5 for one, but that won't alter the market cap much, and if you play them right, can often offer a short term top-up benefit.
Good luck, whatever you do. I want to see all good honest people win.
Gw
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