big money pouring into gold

This article is worth a read. According to it gold mining companies are attracting big capital. Not only the big miners but the smaller companies looking to get into production as well. It appears that the gold sector will run counter to the prevailing trend of lack of access to credit.

http://news.goldseek.com/GoldSeek/1234452540.php

"Just take a look at the recent money which has been put into gold companies across the board. They’re all getting new cash. Major miners looking for extra cash to fund takeovers, exploration, and mine development are getting it. Small gold companies looking for one more financing to put themselves into production are getting it too. There’s money out there for gold.

For instance, Newmont Mining (NYSE:NEM) is expecting at least $1.7 billion (or more depending on the final terms of agreement) in new cash in its coffers. The cash infusion will come from the sale of stock and convertible notes. That’s billion – with a “B.”

Leading the charge in putting this financing together was Citigroup, J.P. Morgan, and BMO. They’re the big money. And they (except for BMO) wouldn’t have given gold the time of day when private equity players were chasing after real estate, Chinese companies, and other “hot” sectors over the past few years.

Of course, it’s not just one big deal though. It’s lots of them. Industrials may be going under because they can’t get financing. When it comes to gold companies though, there appears to be plenty of money available.

In the past few months there have been a slew of financings of gold companies. Together Yamana (NYSE:AUY), Agnico-Eagle (NYSE:AEM), and Kinross Gold (NYSE:KGC) have attracted more than $800 million in new money.

Even gold companies which were pretty much left for dead during the credit crunch are getting the cash they need. Shares of Osisko Mining (TSX:OSK) dropped well below $2 per share in November amid concerns the company wouldn’t be able to get the cash necessary to move forward with its prospective gold mine. Three months later shares are trading above $4 after hitting highs of over $5 per share. And it now has the money it needs. NovaGold (AMEX:NG) went through a similar ordeal. Its shares dropped all the way to 37 cents only to climb back to close at $3.52 yesterday.

These are just some of the bigger deals. We could highlight the dozens of smaller deals which are or are about to get some new capital, but you get the point. There’s big money backing gold now."