The Gold Miner's Secret
posted on
Feb 20, 2012 12:22PM
Saskatchewan's SECRET Gold Mining Development.
The Gold Miner's Secret
When all else fails, dilute the shareholders. THAT is the gold miner's secret. In the sector, you have exaggerated widths, grades, economic analyses, massive up front developmental costs and finally relentless shareholder dilution as they try to make up for the shortfall. And when you have absolutely nowhere to turn with further dilution, you hedge your production.
Even though gold miners are literally digging money right out of the ground, the paper version has to be conjured up. A great number of promises have been made, and expectations have been set very high. But yet, gold miners still make absolutely terrible investments. What is needed, after all, is a still higher gold price.
But there is one sector where people readily cheer massive shareholder dilution with no possibility for growth in the sector, and no real future:
"Greek bank rally sees Athens outperform this year
Mon Feb 20, 2012 11:08am EST
* Greek banks extend six-week rally, pushing bourse higher
* Shares in Athens outpace rest of euro zone * Valuations boosted before state recapitalisations By Francesco Canepa LONDON, Feb 20 (Reuters) - Relief that listed Greek banks will escape nationalisation has seen the sector soar this year, helping Athens outperform major European bourses throughout tense weeks when the country teetered on the brink of bankruptcy. While international investors fretted about Greece's debt negotiations, domestic buyers helped banks such as National Bank of Greece and Piraeus Bank more than double their share prices in six weeks. Investors initially worried that government plans to recapitalise the banks would involve issuing common voting shares, which would give the state effective control.
But plans confirmed by the government now envisage recapitalisation via common shares with restricted voting rights or convertible bonds that would leave the banks in private hands."
What should come as a great relief to all is if and when the banks themselves become very anxious to hoard gold. Better than an investment in long term treasury bonds with very low interest rates and very apparent currency risk.
At least you would wind up with a higher average gold price and no currency risk.
-F6