by Andrew Hoffman, Miles Franklin:
It’s Wednesday morning; and again, I’m having difficulty focusing on a single “horrible headline” – or if you will, a single “horrible topic.” I could start by following up with yesterday’s “PDAC, the Epitome of Mining Ineptitude” with this article from Brent Cook – a geologist who has written a mining newsletter for years – titled “Exploration cuts killing miners’ future.” And this one, of how Australian gold production rose in 2014; but “due to lower prices, Australian gold miners increased the ore grades they were targeting, and pushed their processing plants even harder. In other words, though “superficially, the figures give the impression of a healthy and vibrant industry, “higher grades and greater throughput shortens mine lives.” In other words, a “perfect storm” of an essentially dead development pipeline; collapsed capital availability; plunging capital expenditure; a vanishing junior mining sector; and cannibalistic “high grading” have indeed set PM mining for the “Armageddon” we forecast. Throw in the borderline fraudulent, but more aptly characterized “optimistic” mining resources we discussed last week, and said “storm” only appears more ominous; as global demand continues to rise, amidst the relentless money printing blitzkrieg of desperate, can-kicking Central banks.
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