BlackRock Inc. Expects More CEOs of Gold Producers to Exit
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Worth repeating, as I have said before, Silverado Gold Mines production could be around $500/ton which would allow the company to mine at a profit, while the average production cost for the majors $1,100/ton. $900oz Gold will force the majors to mothball some of their projects while selling off the low grade projects in order to survive. With world wide high demand for physical gold soaring, Silverado Gold Mines could be among the few with a sign on the front door "Open for Buisness" selling the flavor of the day, high grade "Gold-Antimony" All the company needs to do is find the right financing to put the Nolan Creek project into production, and the world will beat a path to their front door!! GRIM REAPER's "DD" Work http://agoracom.com/ir/Silverado/forums/discussion/topics/579172-silverado-est-production-cost-500-vs-1-100-for-major-mining-companies/messages/1818780#message
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BlackRock’s Hambro Sees CEO Exits as Gold Miners Book Writedowns
By David Stringer - Sep 26, 2013 6:46 PM PT
Stock Chart for BlackRock Inc (BLK)
BlackRock Inc. (BLK)’s Evy Hambro, who manages the $8 billion World Mining Fund, expects more heads of gold producers to exit as companies book further writedowns after the metal’s biggest quarterly drop in more than 90 years.
“It’s very clear to us that there will be further writedowns as we go into the full year, or the results season at the beginning of next year,” Hambro said in an interview, declining to name any companies. “I would be very surprised if we didn’t see more change in CEOs across the gold industry.”
Producers from Toronto to Melbourne are pledging to curb spending and halt expansions after taking $26 billion in writedowns since July in the wake of the price decline and an acquisitions boom. Output from the 10 largest global producers increased in the three months to June 30 to 5.6 million ounces from 5.4 million ounces in the previous quarter, according to data compiled by Bloomberg.
“Companies have been chasing ounces instead of profitability and return, and now those decisions in the past are coming back to haunt them,” Hambro said yesterday by phone from London. “There are lots of ounces still being produced that aren’t profitable. The gold price fell six months ago, what’s going on?”
Optimistic assumptions on gold prices used to calculate the value of reserves mean some producers probably face new impairments, Goldman Sachs Australia Pty forecast last month in a report.
The industry shake up has claimed at least seven CEOs of North American producers in the past 18 months, including Aaron Regent as the head of Barrick Gold Corp. (ABX), the world’s largest producer. Investors needed to see the industry move to cut costs and stop unprofitable production, Hambro said in June.
“We have seen this train smash coming,” he said yesterday. “The majority of gold companies have been like rabbits caught in the headlights - they are not moving out of the way.”
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