Rick Rule, Agoniste

The gold price simply wasn't high enough to sustain any new project until just about now.

If you use Tom's Inflation Calculator, and look at the WGC long term MAX chart and adjust for inflation using shadowstats, you'll see that gold prices will reflect the same purchasing power as you might have had in 1997 only above ~$1750/oz. After this time, gold became a depreciated asset. Gold had already declined in terms of purchasing power over the years, and starting up mines from the 1980's onward was increasingly difficult.

Going back further and using the same 'eyeball' average price through the years of $400/oz., you'll see that gold mining projects that started during this period were easily able to pay their bills because gold would have had the equivalent of a much higher purchasing power.

Added to this, Canadian mines enjoyed a 30% premium by selling their gold in U.S. dollars due to the lag of the Canadian dollar to the U.S. dollar over this same period.

So that means the lights come on once gold prices are seen to be sustained above this price level, perhaps sustained ~$1800+/oz.

http://www.safehaven.com/article/25164/why-im-excited-about-this-gold-market

-F6