The Most Obvious Trade in History!
For a moment, I want you to forget everything you know about gold.
Forget about the monetary history, government debts, bond bubble, pension fund crisis, unsustainable financial system, and even the recent news about Iran no longer trading dollars or Turkey demanding a gold-backed system… Also forget China and Russia’s enormous appetite for the yellow metal.
The fundamentals for an incredible run for the yellow metal can’t be overstated due to the collapsing supply. Everything else mentioned above is “literally” just the icing on the cake.
Last week, the China Gold Association, home to the largest gold producer on the planet, announced a second year of declining production (-6%).
Barrick Gold reported yesterday that it’s seeing huge production declines – a17.5% decline in total.
Barrick’s Acacia project in Arica actually declined 45% year-over-year!
In Nevada, they saw 9.6 to 16.4% declines at their projects. Peru was even worse, with a decline of 25% year-over-year.
In Argentina, the Veladero mine saw a cliff dive of 51%!
The stunning news didn’t end there; from what they did mine, they had much lower ore grades coming out of Nevada than originally projected.
Gold production has plateaued globally and is now in decline, yet demand continues to surge higher.
Anyone who is remotely familiar with the mining shares knows that exploration has been a huge fail for the past 15+ years, with no new major discovery in the last two decades!
With the bear market of 2011 to 2015 and the recent depression we’ve seen in the shares since the summer of 2016, the pipeline for new production simply isn’t there.
Keep in mind that most mines take a good ten years from discovery to production, and hundreds of millions of dollars, or even more than a billion dollars, in some cases.
The majors have no choice: they either start acquiring minable/permittable gold projects or they will simply become extinct.
It’s why we’ve highlighted First Mining Gold (TSX: FF & US: FFMGF) for you.
Consider accumulating shares of this company, headed up by Keith Neumeyer.
With 25 gold projects, one of which is one of the largest undeveloped gold assets on the planet, First Mining’s portfolio is a likely takeover target, in our opinion.
As we pointed out last week, it’s also one of the cheapest value propositions we’ve ever seen!
A single property is valued at 3x the company’s current market capitalization.
In our opinion, this is like buying a dollar bill with a quarter.
Our Recommendation: Partner with Keith Neumeyer by taking a strategic position in his new gold company, First Mining Gold.
Looking at the case for peak gold supply and then factoring in all those things I asked you to forget about for a moment, like China’s accumulation of the metal, major challenges approaching the dollar, and our own suicidal bond market, you can see why I believe owning gold investments today is the most obvious trade in history.
Legal Notice: This work is based on public filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.
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