June 11th, 2020 | 11:03 CEST
Newmont, Triumph Gold, Victoria Gold - Precious metals belong in the portfolio
The financial crisis in 2008 and the current corona crisis differ fundamentally in the assessment of the economic aspects. Central banks and politicians have maintained growth and productivity by increasing the money supply in order to avert a global economic standstill in connection with the Lehman bankruptcy and its aftermath. At that time, the freshly printed money was used to invest, create something and create value. The current measures are about four times as high and the global economy is at a standstill - it is even in recession. From a social point of view, the measures to maintain social peace are appropriate, but when it comes to wealth creation, they resemble a catastrophe. There is a need for action.
time to read: 1 minutes
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Author:
Mario Hose
ISIN:
CA8968121043 , CA92625W5072 , US6516391066
Table of contents:
"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
Author
Mario Hose
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
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Gold doesn't grow back
The precious metal gold is generally mined in an expensive process. In the first phase, deposits must be discovered through exploration. The discovery in itself is not enough to start production. The next step is to find out how large the deposits are. Exploration is risky and costly, but it is also the phase of value creation, where in relative terms, a high return on investment is possible. Once an economically viable amount of gold has been discovered, the development phase can begin, followed by production.
Next acquisition target in the Yukon?
Triumph Gold is a Canadian company focused on the exploration of its own projects in the Yukon. The Freegold Mountain project is located along a main road that is open to traffic year-round and therefore access is guaranteed. Drilling programs and discoveries continue to expand the amount of gold deposits. At a critical mass of proven gold and a certain price per ounce, a takeover by a producer is likely. Newmont already holds 18% of Triumph Gold and thus has a foot in the door.
Canada's newest gold mine
Victoria Gold is also located in the Yukon and has been producing at the Eagle Gold Mine since September 2019, after more than ten years of planning. At full capacity, an annual production volume of 210,000 ounces per year is to be achieved. The cost per ounce is estimated at USD 774.00, the margin is currently almost USD 1,000.00 per ounce. Total reserves of 3.3 million ounces have been determined, which is sufficient for a mining period of eleven years.
Gold offers security for assets
Considering that money is put into circulation without a deposited value, gold offers one of few ways to secure existing assets. Cash under the pillow or in the bank account can soon become a disadvantage in terms of purchasing power. The easiest way for investors to park their assets in shares of gold companies. The market value of Triumph Gold is CAD 23 million, Victoria Gold is valued at CAD 813 million and Newmont's market capitalization was recently over CAD 63 billion.
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