We attended the virtual versions of the Precious Metals Summit and Gold Forum Americas (a/k/a The Denver Gold Forum). The Precious Metals Summit features junior companies1, most of which are “cashed up” from recent equity raises. As a result there was an abundance of drilling results, project updates and plans for more drilling. In our view, with new money comes new discoveries. And, in a number of instances, this certainly seemed to be the case.

The Gold Forum Americas conference reiterated and enhanced the industry trends that we have been talking about for several years. Large gold producers tripped over each other to inform investors of their cash-generating ability and commitment to return money to shareholders through increasing dividends and/or share buybacks. Balance sheets are pristine, as those who aren’t already in a net-cash position should get there by early 2021. While there isn’t much growth amongst the large companies, many emphasized sustainable production bases for ten years.

Most companies continue to use conservative pricing in the $1,200 to $1,300 per ounce range to calculate reserves and project economics. Companies also expressed a commitment to increasing Environmental, Social and Governance (ESG) initiatives. All of this bodes well for gold equity investors and demonstrates the sustainable financial and operating strength of the industry.

MVIS Global Junior Gold Miners Index


Source: MV Index Solutions GmbH. Data as of 30 September 2020.

1 “Juniors” are gold mining companies that typically produce less than 0.3 million ounces of gold per year while Seniors” and “Mid-Tiers” are gold mining companies that produce, approximately,1.5-6.0 and 0.3-1.5 million ounces of gold per year, respectively.

About the Author:

Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.