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Gold
is making another run at $1,000, silver is up even more in percentage terms,
and the financial markets are showering the established miners with cash: In
February Newmont raised $1.7 billion, while Yamana, Agnico-Eagle, and Kinross
Gold have between them raised over $800 million. And last week Goldcorp
offered to sell $750 million of convertible bonds, but ended up with $860
million because the offering was oversubscribed.
At
the other end of the size spectrum, dozens of junior miners that a year ago
were running out of cash and contemplating the end of their dreams are
suddenly able to raise enough capital to keep exploring and producing. Here's
a (very) partial list of good news announced in the past few months:
•
NovaGold added 14.7 million ounces of gold to the reserves of its Donlin
Creek property, which it owns jointly with Barrick Gold. The mine is expected
to produce over one million ounces of gold annually for 20+ years.
•
Allied Nevada increased its gold and silver reserves 244% and 298%,
respectively, and now projects full mine operation by mid-2009.
•
Aurizon Mines found two new veins of gold on its existing properties. Both
deposits are still open, implying that they'll yield more positive results as
further drilling defines them.
•
Since June 2008 Detour Gold has made a total of nine new gold discovery
announcements at its Detour Lake property.
•
Rubicon Minerals recently announced "a new deep intercept of lower grade
gold mineralization at a depth of 4,715 feet (1437 metres) below surface,
some 1,050 feet (320 metres) deeper than the previous deepest intercept. The
new intercept suggests high potential for additional gold mineralization to
depth."
•
Chesapeake Gold announced that its Metates project now has measured and
indicated resources of 14.7 million ounces of gold, 396 million ounces of
silver and 2.6 billion pounds of zinc.
•
Endeavour Silver's Q1 silver-equivalent production rose 22% to 736,235
ounces, while its "total silver-equivalent mineral inventory" rose
24% to 62.3 million ounces.
•
Atna Resources announced that its Pinson joint venture with Barrick Gold
"continues to host numerous high grade gold intercepts on a number of
structures all located in a relatively small area. We feel that Pinson has a
good potential for development due to its gold grade, location in the heart
of the northern Nevada gold belt and close proximity to existing autoclave,
roaster and mill complexes."
I
could keep going, but you get the idea. Lots of juniors, it seems, are about
to become mid-tiers -- or at least viable producers. But many won't make it
that far. With the majors as a group failing to replace the metal that
they're taking out of the ground and capital suddenly plentiful, the
conditions are ripe for a buy-out boom in which the big guys start snapping
up the best juniors. Once the party gets going, the question on everyone's
mind will become "who's next?", and hot money will send the most
likely prospects through the roof.
John Rubino
DollarCollapse.com
John
Rubino is co-author, with GoldMoneys James Turk, of The Coming Collapse of
the Dollar and How to Profit From It (Doubleday, December 2004), and author
of How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main
Street, Not Wall Street (Morrow, 1998). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a Eurodollar trader, equity
analyst and junk bond analyst. During the 1990s he was a featured columnist
with TheStreet.com and a frequent contributor to Individual Investor, Online
Investor, and Consumers Digest, among many other publications. He now writes
for Fidelity Magazine, CFA, and Proto.
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