by Tekoa Da Silva, Bull Market Thinking:
I had the chance to connect recently with Bill Reid and Jason Reid, Chairman and President & CEO, respectively, of Gold Resource Corporation.
It was a fascinating conversation, as the father & son duo have operated a mining company with such a conservative fiscal framework with regards to capex spending that, “everybody rolls their eyes,” in the industry, upon hearing the team’s rule of a one-year payback time or less.
Speaking towards the cyclicality of the mining business, Bill noted that for investors, “You have to understand from the beginning that this is a cyclical business. Now actually this last cycle has been a good one. It’s been basically an up-cycle for the last decade. The gold price on January 1st vs the gold price on December 31st has been up the last 11 years…So this has been a good cycle. 2013 is the first year in a while that we’ve had a down-cycle in the gold price and of course, people are ready to bail out. [So] we’ve had a pretty good run [but] I don’t think it’s over yet.”
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