Predicting gold to be worth tens of thousands of dollars or sub a thousand is a guessing game. The internet is full of people who guess. Look at what gold is today and then Discount that. Does the company still stack up? There will be 80% of gold companies fail before Bc8 with this grade. Most listed companies will never get fully funded. It’s a grave yard without flowers. As Murdoch once said, ‘analysts make weather men look good”.
The printing of money, the increase in debt, (the money supply) has never been close to these levels.
You buy a stock based on many things, and it’s can’t just be on predictions. That’s just wishful thinking. Wishful thinking also comes in 2 extremes. The positive and negative. Some want things to fail and some want to be right. Neither is often based on research. The main game for resources is GRADE. Grade is definitely king. Having mills on the surface is also king in this environment. The next no brainer is management, location, costs, access to infrastructure, mine life, exploration upside, company structure, ability to access funding, recoveries, low capex, no sovereign issues, friendly govt. I call this ‘stacking the deck’ in your favour. As much as some might wish bc8 to fail, (God knows why they get joy from that) or it’s full of suckers, the above still stands. If the above wasn’t true, then I wouldn’t own it. Simple as that. The only thing that will matter in the end, is how the company finishes. This is a near term drill out to the final Insto placement before restart next year. It’s not rocket science. Risk is always there, but that always comes down to predictions again. Back management and the asset or back away. This company was built from a small lease to 2.4m ounces and multiple infrastructure assets with high grade assets during covid. I think we have hit peak pain. No straight line in this game.
Will they do a toll treat or will they decide it’s much better to hold the gold for their own mills? What will some people do then? Who cares if you raise and turn on Paulsens anyway! Companies need to be flexible as well. If people sell, the market will absorb the stock anyway. It’s been a lot lower than this price.
20 years ago, until now, gold rose 5x. People were laughed at making those predictions.
If you look at this long term chart, the big runs are into and after peak inflation. You will also notice that predicting super low gold prices doesn’t add up. If gold ever were to return to sub $1000, then we can assume everything was fine and everything returned to better than it’s ever been for the last 20 years. Not seeing that myself. Not with these debt hungry badly run govts. Central banks have been buying more gold that at any time in the last 50 years for a reason. China and Russia have been massive buyers. You get the feeling that this war has been planned for a long time. They can soak up physical gold while using the paper market to get what they want. I believe the paper market is 50x the physical market and yet gold still moved 5x. Most people wrongly assume gold is dead. You can make good money out of dead $2700 gold then. Risk still remains.
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