 |
| GOLD RATE |
|
CIty |
Gold
|
Silver |
|
Lahore |
PKR 117,300 |
PKR 1,574 |
|
Karachi |
PKR 117,300 |
PKR 1,574 |
|
Islamabad |
PKR 117,300 |
PKR 1,574 |
|
Peshawar |
PKR 117,300 |
PKR 1,574 |
|
Quetta |
PKR 117,300 |
PKR 1,574 |
|
Sialkot |
PKR 117,300 |
PKR 1,574 |
|
Attock |
PKR 117,300 |
PKR 1,574 |
|
Gujranwala |
PKR 117,300 |
PKR 1,574 |
|
Jehlum |
PKR 117,300 |
PKR 1,574 |
|
Multan |
PKR 117,300 |
PKR 1,574 |
|
Bahawalpur |
PKR 117,300 |
PKR 1,574 |
|
Gujrat |
PKR 117,300 |
PKR 1,574 |
|
Nawabshah |
PKR 117,300 |
PKR 1,574 |
|
Chakwal |
PKR 117,300 |
PKR 1,574 |
|
Hyderabad |
PKR 117,300 |
PKR 1,574 |
|
Nowshehra |
PKR 117,300 |
PKR 1,574 |
|
Sargodha |
PKR 117,300 |
PKR 1,574 |
|
Faisalabad |
PKR 117,300 |
PKR 1,574 |
|
Mirpur |
PKR 117,300 |
PKR 1,574 |
Yeah look I mean gold is the universal currency it has been for millennia it's recognized as a currency uh regardless of where you go in the world um and it can be exchanged for local currencies rarely anywhere in the world every corner of the universe the gold in the ground that's been delineated by exploration drilling and the industry has done an exceptional job over the last half a dozen years of harvesting returns from their existing mining assets what they haven't done is reinvest back in expiration development because at the end of the New minds up into productive capacity but the demand side of it is also very very constructive because we're in a lower for longer interest rate environment we're actually experiencing nominal rates that are negative in some cases and on a real basis for sure given where inflation is we have negative real interest rates on a sovereign debt so there's no opportunity cost of owning gold today,
The day a mining company is a collection of finite life assets every day that we might announce a gold we die a little bit unless we're reinvesting back into expiration that hasn't happened because there was quite a party ten years ago uh post the credit crisis gold wrote to over 1900 an ounce copper was reaching new highs at the time and the industry was investing in significant new mine capacity but they strapped on a lot of debt doing that and the input costs escalated dramatically because of the rush to invest in new capacity there were finite resources available to do that and so we saw inflation and labor costs and input costs
Generally and that undermined the leverage propositions investors were looking for in gold stocks and investors stayed away and so the money industry said well okay we have to be leveraged we have to harvest the returns we promised on these assets so they went through half a dozen years of doing that very very well the is a net-zero debt now so they've done a good job of repairing their balance sheets but what they didn't
do is replace what they're depleting and that's why we find ourselves in this kind of existential crisis in the gold industry right now selectively they've actually been able to access capital markets now that wasn't the case a couple of years ago they went through a nuclear winter as the seniors focused on harvesting you know cash flows in their existing assets they just weren't putting money to work with the juniors they weren't exploring in any meaningful way and the capital markets enjoy ignore it excuse me ignore the juniors but the juniors are actually starting to raise capital now and they're doing that from a couple places traditional sources the equity capital markets selectively but also the
Established producers are effectively outsourcing their grassroots exploration to the juniors they're putting capital work within the juniors taking told investments in them so they actually start to put some capital work and the seniors are taking more of a portfolio approach towards that you know they're playing capital across 15 20 30 names within junior space small amounts of capital because the success ratio is so low in the junior space it's almost like winning a lottery and we actually find something and because of that high-risk ratio you're deploying that capital and spreading it around diversifying so the juniors are starting to spend more capital they're starting to get more tax traction in the capital markets
And inevitably what will happen is the established producers will have to start to take the juniors out that that are successful and they find something meaningful economic large enough for the seniors to actually deploy capital towards so I say selectively you're going to start to see some m and junior space golden have over the last couple of years and likely to enjoy going forward is being driven by two factors one is this declining supply um so it's a remarkable inelasticity of supply to price even as the gold price has been going up the industry can't just flick a switch and add more supply the lead times new production are long sometimes decades to bring new minds up into productive capacity but the demand side of it is also very very constructive because
we're in a lower for longer interest rate environment we're actually experiencing nominal rates that are negative in some cases and on a real basis for sure given where inflation is we have negative real interest rates on sovereign debt so there's no opportunity cost of owning gold today the actual physical paper currencies this is disappeared and what we're getting is a proxy for paper currencies in the digits on on their ledgers on their balance sheet um and the fact that banks are actually talking about getting into the cryptocurrency market digitizing their own currencies is inevitable and so there's less and less visibility in terms of where your cash is right now and that's why i think it's so important to have a component of your portfolio in gold whether it's physical gold in a bolt in a safety deposit box or whether it's a proxy for gold in terms of the gold equities or the royalty companies and then that's really the beauty of gold is its universality and its inability to be debased um and you know because it's so finite in quantity uh and i think that's the advantage whereas obviously with fiat currencies there's infinite availability of fiat currencies how hard it is to actually find gold because a lot of these
companies fail you're right 19 out of 20 juniors that are out there promoting fail because it's such a difficult proposition to explore and find gold it's it's called precious for a reason it's very rare in terms of its occurrence in the earth's crust very difficult to find and more importantly very difficult to actually mine the barriers to entry extremely high geological risk technical risk is capital intensive it's a tough business but I've been in the business for over 30 years and I've built 15 minds in my career I operated countless more than that so I've been on the large-cap side of the business for a long time and been successful in building and operating mines but I can tell you even with that kind of track record how difficult the business it is and
how difficult it is to enter into it and to bring production capacity up and running we are a collection of finite life assets in the mining business and every day that we might announce a goal we die a little bit unless we're reinvesting back in expiration to find more and we haven't been doing that the industry has been focused on harvesting its returns repairing their balance sheets and that's what you know the investor community demanded of them and so having done that our assets depleted our reserves are going down and as a result,
our production is declining and so in the face of rising gold prices we're just not responding with supply we can't it takes a long time to find deposits it takes a long time to build them out
it's very capital intensive it's super risky and so, as a result,
we're not seeing mine supply go up in response to the price we're actually seeing it go down so that divergence is going to drive the gold price to new highs in my view yeah this is certainly a reflexive reaction towards mining generally but we need mining it's important to our economy not only on the
gold side, because you know, provides us uh capital and the preserver capital on the gold side but copper, for example, it's very very difficult to get a new copper mine um built-in in the united states but we need copper to decarbonize our economy all those electric vehicles use a lot of copper, in fact,
three times the copper that a normal vehicle would use and so if we want to bring down our emissions we need copper in our power infrastructure we need copper in our vehicles and it's virtually impossible to get a new copper mine built in the united states in Arizona in particular so mining is a very very difficult business to get a social license to operate whether it's in gold or copper or any metal for that matter
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