Via GATA.org

Murray Pollit's last letter was published last week, and it's been announced that he has since passed away.

Murray Pollitt's letters are a source of very cogent information on money, mining and the gold markets. His POV was the only voice in the wilderness attempting to dissuade from relying on open pits derived from wide drill intercepts.

"However, particularly in the Canadian scene, assets require some definition. For example, this business of “ounces of gold in the ground” is, at best, a dubious measure. Are those ounces really there? Can you get them? Will the metallurgy render them uneconomic?Does management really know how to build a mine? And, above all, capex is likely to be so large that the mine is uneconomic. In fact, whether a pipeline, a tar sands complex or a big mine, capex projections are now extraordinary. So, when investing, consider whether the enterprise has already expended many of the costs to get in business (sunk costs) or is still at the dreaming stage. And if we are talking resource investments, the dream world is all too often a sinkhole.

It does not follow that a rising tide lifts all boats – too many have leaks or are just plain unseaworthy. But with the money mountain shifting into our kind of investments, we should have the mother of all bull markets on the horizon. Remember the old bard: “There is a tide in the affairs of man...”

http://www.gata.org/files/MurrayPollitt-02-03-2012.pdf

-F6