We attended the Denver Gold Forum in September and met with a range of companies. Despite the high gold prices, there was no sense of euphoria, and the overall message was one of sound business fundamentals. A priority was placed on organic growth through brownfields expansion and/or increasing reserve lives. Companies were not talking about expansions through M&A or large greenfields development. These were the main sources of value destruction in the last bull cycle when companies overpaid for acquisitions and developed properties that required too much capital.
Joe Foster on His Way to Visit a Gold Mine in Colombia
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Given the newness of $1,500 gold, the real test will come at the next Denver Gold Forum. If the gold price remains elevated and if companies are still exhibiting strong capital discipline while containing costs, investors should be very happy.
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