Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich March 3, 2014. A return to the Bretton Woods system would require a gold price well in excess of $25,000 per ounce, Martin Murenbeeld says.Reuters
Globe editors have posted this research report with permission of Clarus Securities Inc. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
Clarus Securities attended the annual Denver Gold Forum. This year's event saw 1,022 attendees, around the same level as the 1,035 attendees last year. With gold under pressure and down 10 per cent from its year highs of $1,379 (U.S.)/oz, the enthusiasm was measured as most companies tried to posit how well positioned they were to ride out the storm.
However a significant portion of current production remains unprofitable and if that supply came off line, there would be a significant impact on price as physical demand remains strong.
We got the impression that companies are more willing to pull resources and work together to rationalize assets to lower their cost profiles. We expect this to drive some more M&A as lowering G&A could help bring cost profiles lower.
In this summary report we have outlined the key take aways from some of the one-on-one meetings we had with companies that stood out as clear survivors with either:
(1) A low cost profile that allows them to generate FCF even at low gold prices (Randgold Resources & SEMAFO)
(2) Fully-funded high margin projects with solid management that can be brought on stream with low execution risk and attract a re-rating (Asanko Gold)
(3) Attractive high grade (Orbis Gold), high margin projects that can sustain large scale profitable operations and are attractive on an M&A angle (Orezone Gold)
Read the full report here.
Read other research reports here.