Here's a fact that we have preached for a good while now but is finally getting more attention in the media - There's no more gold around! This is not only a fact, it's a serious problem for the major producers.
So, what can a Barrick, Newmont or a Goldcorp do? Well, we have seen a trend in the last two years or so where these companies take an equity stake (usually 10-19.9%) in a junior explorer or do a straight-out JV on a project.
The fact that there is a shortage of gold reserves and new development projects will be a big factor that drives gold prices higher. Also, the fact that there are no more large discoveries in the world will force large producers to act. As the price of gold moves higher, the large producers will have to act swiftly and aggressively, or someone else will swoop up "their" project. There will be a bidding war for development projects in the coming years, mark our words.
These are some of the reasons why we have switched our portfolio holdings from producers to exploration juniors in the last year. And we will continue to invest in what has the potential to be the next important discoveries.
In fact, we hope we will be able to offer the IPO of a new North American exploration company later this fall to our Gecko Investor Group (GIG). For newly arrived subscribers, find out more about GIG here.