mining shares better bets than goldGold mining shares are better bets than gold - Franklin Templeton
SINGAPORE, July 25 (Reuters) - Investors who are bullish ongold should consider buying shares of gold miners to gain theadditional returns from greater efficiency in extracting themetal as well as the discovery of new mines, a FranklinTempleton fund manager said on Monday.
Fears of a possible U.S. debt default and uncertainty overthe euro zone's debt crisis have led investors to pile into safehaven asset, driving spot gold price to a record highabove $1,622 an ounce on Monday.
Steve Land, portfolio manager of the U.S. fund manager'sFranklin Gold and Precious Metals Fund, think buyers of physicalgold or exchange-traded funds linked to the yellow metal can geteven better returns by investing in gold miners.
"Some of the upside with equities that you don't get withcommodities is the potential for exploration success. We thinkthere's a lot of value to be created on that side of thebusiness in the current environment," Land told reporters.
For instance, high gold prices mean miners are seeingmargins of about 60 percent, allowing them to generatesignificant free cash to explore for new deposits, expand theiroperations and pay higher dividends.
Gold mining firms that Steve Land is bullish on include Canada'sNevsun Resources and Osisko Mining Corp , whichhe described as "earlier stage companies" with "land blocs thatthey haven't thoroughly explored".
(full article)
https://af.reuters.com/article/metalsNews/idAFL3E7IP1O120110725