I posted something like that sometime back
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51190367
Investing is a little bit of wisdom, some luck, a lot of hard work and the most important factor of all
Time
. If you started your gold mine/miner investment in the last few years then consider yourself lucky. I started my gold mining investment in the tail end of the gold bust cycle of the late 90s. This is personally the most difficult time for me in terms of my relationship with gold. The only real positive during that time was that the gold price was cheap! I wish I was in better financial situation back then because this is the time when I bought my first handful of ounces. Gold sentiment was so bad that Peter Costello sold a lot of Australia's gold into the open market. I suppose I have always been attracted to gold, a very young Exised even went out of his way to do "Work Experience" for a gold explorer one summer
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47921796
happy to claim that I played a small part in the Mungari discovery back in the day but sentiment was so bad that a 1.52g/t gold find was nothing be excited about. But full credit to EVN (current owners) for improving that to 50.92Mt that it is today. Point is it may have looked bad back then, much like things are looking bad now, but given time investments reveal themselves to be a winner...
From someone that have been playing with gold miners for a while, the best that I can say is to have time on your side. Just like any investments I suppose. Think about it, when time is on your side you don't care what it sells for today. If you did your homework before you bought and bought at the best possible price you can buy, then you should already know with good certainty that it will be higher in the future than what it is selling for today. If you don't need the money today why should you care what your investment is selling for today. If you needed the money today or even this year then you should never have put it into an investment in first place. Just remember, for a sale to happen there must be a buyer and a seller. When you have time on your side you don't have to be a seller when it doesn't suit you. Even better, you don't have to be a buyer when it doesn't suit you. So don't penalize yourself for not jumping onto certain investments either...
There is however a big "BUT" as there are peculiarities to gold companies:
1. Have a long term view on gold and gold mines but not gold companies. You never know with enough certainty which gold company will come up big through the cycles. Literally prior to the last 10 years, I can categorically say that only 4 Australian gold mining companies were investment grade (Normandy, Pacmin, Lihir and Sino Gold). That was how hard it was to find a good gold company during a gold bust cycle and none of those exist today (unfortunately).
2. Like many here there was a time when I didn't know any better and most of my gold mining investments was in none Australian assets. Lihir (Papua new guinea), Sino Gold (China). The Ace in my pocket however is that, I kind of knew what is a good find thanks to a little bit of experience from that summer job with the explorer stated above. Although Lihir and Sino were Australian companies they did not own Australian mines but they were very very very good investments. I guess this supports point 1 above too that, you never know with enough certainty which gold company will come up big. My preference is and always will be tier 1 jurisdictions but I'm willing to overlook this if the find is a compelling investment but so far I have not found one compelling enough by the looks of it...
3. Back good management, Lihir talents (Alan Roberts and Neil Swan) went to Golden China Resources... which surprise surprise was taken over by Jake Klein's Sino gold. Although Sino gold no longer exist thanks to El Dorado acquiring it. The talent in Sino (Jake Klein) remains which created Catalpa/Conquest now EVN. Alan Roberts and Neil Swan now run a mining investment firm (Taurus Investments) which was integral in bankrolling WAF, Talisman, Toro, Teranga etc... Plenty of other talents out there, NST and SAR in particular deserves a mention. Normandy mining too although mostly retired now...
4. The gold mine is more important than the gold company, I think I've made this point previously already and posted a gold mine list here somewhere. This point is not as important when in a gold bull run as we are these days. We are spoilt for choice on well run and reasonable asset producers because the gold price is high and everyone is cashflow positive... The best Australian mines came from the legendary gold company Normandy. These mines are now mostly owned by NST (apart from Boddington which Newmont will never let go), SOG/Pacmin mines are now owned by SAR and the main SOG mine Gwalia by SBM. This is why the NST SAR merger is very important to me from a historically perspective because it brings together assets from Normandy and SOG. Normandy and SOG had a fierce rivalry much like the EVN and NST rivalry of today... a company that owns almost half of Australia's top 20 gold mines (a consolidation of Normandy and SOG mines basically into 1 company) is a dream come true...
(20min delay)