has been years since Australian gold miners have had the odds in their favour, but their fortunes are starting to change. Business commentator Tim Treadgold said the turnaround was being driven by the combination of a rising US gold price and a lowering Australian dollar. "The price in Australian dollars has gone up a lot because the Australian dollar has gone down a lot," he said. "But also costs are starting to fall in the gold industry, labour costs are coming down." Since the middle of last year, the Australian dollar has fallen sharply against the greenback, from almost 94 to around 75 US cents. So as the gold price in US dollars lifted, the price in local currency gained even more. That meant the Australian dollar gold price was around $1,500 an ounce. Mr Treadgold said that had attracted the attention of international investors. "London loves gold and they're starting to revisit Australia," he said. "Australia has become a cheaper place in which to invest, the pound's stronger, the Aussie dollar's cheaper. He said companies were evenmore atstarting to bid over assets like Northern Star swooping Metal X on its bid for Tanami Gold's project in the Northern Territory. More at Abc news
Yeah but the next part of the story was from an actual gold miner saying that the margins of the industry is so bad they're barely making $150/ounce margin.
Dunno if he was talking about EBITA profit, or net profit? IMHO. That's still a relatively low return based on the amount if risk involved.
I think he's implying that the aud will further fall, that is, gold will rise against the aud, and That will make aussi mines viable.
There's lots of consolidation going on in the gold mining sector and unless you have followed Australian gold stocks for a long time you could get your fingers burnt. If you don't know the track record of the management be very careful before you part with your dollars. Be well aware of a companies so called reserves and have a very good understanding of what is mean by the JORC code. http://www.jorc.org/index.asp Sometimes investors get confused with drill results and although many companies will publish spectacular results for narrow mineralogy, there's no guarantee that the tenement will be profitable regardless of how good concentrations look. Having said that, have a very good understanding of: *Indicated mineral resource *Measured mineral resource *Mineral reserve *Probable mineral reserve *Proven mineral reserve Imo, try to stay away from mines that are deep underground...management can tell you anything they like and investors would be none the wiser, a good example was BDG Bendigo Mining Ltd who had grand ideas but failed. Sometimes, it's better to buy physical gold than invest in miners...I'm not saying don't look at gold miners, just be-aware of what business you are buying into. Lastly, if you do decide to buy, pick those that are low cost, with a proven resource which is close to the surface preferably open cut and a management team that has a good history. Of course, miners that have cash in the bank and a good finance team will help. Happy hunting.
MDon't know much about them, but there is a high risk penny dreadful at .006 called Hill end gold I keep an eye on.HEG. Ive got a block up there. Might be good for a quick in and out. They were at 47 cents at one stage, and have been low for a long time without folding.
It's a little help but if they're buying Korean and American machinery, petrol on the open market and we start feeling a little inflation I'm not sure how permanent the benefits will be. It certainly helps but I'm not sure it's the obvious opportunity the article makes it to be. If you want your gold to be cheap for wage/forex reasons you should go to one of those parts of Brazil where white people go and never come back.
