The past several months the stress and strain on the gold mining industry has reached the inevitable inflection point of no return. We have seen one of the worlds largest gold mining companies purchase one of their contemporaries and it did not satisfy their needs. It appears the gold is running out and the mining giants are, in fact, becoming desperate. Got physical, close at hand? I hope so.
Barrick gold purchased in September 2018 RandGold and some of the funds to purchase this organization were actually in the form of Shandong Gold stock shares.
As part of the deal, China’s Shandong Gold, one of the country’s biggest gold producers, has agreed to buy $300 million of shares in Barrick. The Toronto-based miner will also buy the equivalent amount of shares in Shandong Mining, a listed subsidiary of Shandong Gold, it said in a separate statement. Source
The stench is already beginning to rise from the carcass of Barrick, specifically, and the larger gold mining industry as a whole. It would be almost impossible to convince me the gold and silver mining industry is strong and healthy at this point. Yes, there are winners that will be around for some time, because they are smaller, run by incredibly smart people who are willing to take risk. Barrick, Randgold, Newmont and a couple others do not fit this category.
What has been lost in the most recent noise about regarding Barrick’s ultimate demise, is the fact that GoldCorp has been in discussions with Newmont gold mining as well.
Newmont had raised serious doubts about Toronto-based Barrick’s proposal—a hostile all-share no-premium bid—from the day it was publicly announced Feb. 25. Newmont said its previously announced agreement to take over Goldcorp offered better benefits, and Chief Executive Officer Gary Goldberg called Barrick’s takeover offer “desperate” and “bizarre.”
“The combination with Goldcorp is significantly more accretive to Newmont’s shareholders on all relevant metrics compared to Barrick’s proposal, even when factoring in Barrick’s own synergy estimates,” Goldberg said in the statement. Source
This begs the question – why has GoldCorp been overlooked and not discussed at all during all this mega-merger mining shuffle? Is GoldCorp out of gold as well? Odds are in favor of GoldCorp scrapping the bottom of the barrel just like Barrick. Of course none of this will ever be reported, discussed or brought to light, until it is way, way too late. Can’t bring that kind of attention to the gold market.
For the most part Barrick is a Chinese owned company. If you don’t believe me, watch how they need permission from the Chinese government to make a move or even go to the bathroom.
Meanwhile we have another report supporting all that is happening.
“When we look out over the next five years, there are very few large scale new gold projects earmarked to come on-stream,” the analysts said. “The only large-scale gold projects that we see as probable to enter the top 10 producing gold mining operations by 2025 are Donlin Creek project, owned by Barrick and Novagold, and Sukoi Log owned by Polyus Gold.”
The bank noted that even if major deposits are discovered, they still face development hurdles.
“It is hard to conclude whether new projects shall be commissioned in the next few years regardless of budgets. New projects are also finding it difficult to get approval, two of the larger gold projects being pursued in the last few years were shut down as governments look more and more to environmental factors,” the analysts said. “Barrick’s Pascua-Lama and Newmont’s Conga are examples of projects that have been side-lined in recent years due to challenges in getting environmental permits and social license to operate.”
As to how bad the situation for gold production will get? BMO said that the 10 largest mines that have been operating since 2009 will produce 54% of the gold they used to 10 years ago.
“The top 10 mines in 2009 made up 419.1 [tonnes], but the current top 10 producing mines make up just 226.87 [tonnes].
Along with major producers seeing declining numbers, the bank also expects the world’s largest gold producer – China – to report lower gold output this year. Source
The timelines fit nicely with what we have been saying about gold and silver moving up the charts exposing the fraudulent dollar, rotten economy and criminal banking system. We are more confident than ever the yellow and white metals will be moving to much, much higher ground in relations to the charts. Why would gold and silver continue bottom bouncing when there is nothing on the shelf to bring to market?
Gold does a very nice job of exposing, for close to 6.000 years, the ills the criminals always attempt to cover up. It has never worked in the past and we see no reason for this to change in the future. Gold is money and nothing else. Yes, people use it to adorn themselves, but that’s not really it’s job. Gold is tears of the sun, money from God and carries an intrinsic value that no banker, nor government, can ever take away. We will be adding to our stack as we are able and we hope you review your situation and conduct your own due-dilegence as the news just keeps getting worse and worse by the day. Or better and better depending on your perspective.
