Gold collapse and miningThis project is suffering from the death of the gold market. The bearish views are too many mention just now. One of the things that has really turned off the investment community has been mining cost inflation. If TCM says Milligan will cost a billion, they really mean a couple. There are many examples of this and the miners are basically being cast into the sea with the thought that there are enough mines in production that it really doesn't matter who has or finds new deposits.
The flip side of this collapse in gold price is three fold. First off there is now extra money to go into non gold projects. Secondly there is already remarkably less mining inflation as Caterpillar to Komatsu feel the bite of the down turn. Thirdly, gold production is essentially a waste of time for economies. No one benefits from it's production. With gold down that means that the economies of the world can get back to doing what they should have done all along. Produce goods and services that are in demand.
Those goods and services like electricity(copper), appliances(nickel), vehicles(Palladium and Platinum) etc are going to require these metals in previously unheard of quantities as the economy of the world stops fearing collapse and calamity and heads for new levels of wealth.
In the meantime the TSX venture is having it's flattest experience in the history of the exchange. It has never been this flat ever. Is it forming a base? You bet. Can it go lower from here? Of course, just like the DOW and S&P could have gone lower from 7000 and 800 respectively.
But the more likely chance is that it will be going higher. There are some large amounts of money sitting and waiting to get in without driving up prices- ie Ernesto. As more of these large players soak up the weak hands (ie John Lee) there will be less supply. Since the world is still consuming metals hand over fist, and good deposits are not showing up very often(Look at Pebble- mired in a hundred years of rulings) the value of deposits like Wellgreen, now in the hands of capable and motivated management, will go up in value many times.
A man who is patient can have anything he wants.