Jeff Christian – What Are Major Precious Metals Mining Companies Focused On?
Jeff Christian, Managing Partner at the CPM Group, joins us for a discussion on the overall supply picture in the mining sector, and specifically what the major gold and silver mining producers are focused on. This is a wide ranging discussion that gets into the constant need for the larger producers to replace reserve as they are continually depleting their assets through extraction.
One area that is often missed by investors is that many of these larger mining companies are already sitting on very large resources, not currently held in reserves, that can jump categories as metals prices rise, and thus lifting the underlying price assumptions and moving resource into reserves. As for acquisitions, most of these larger producers are more interested in pursuing advanced and de-risked development projects or already producing mines from the smaller companies, rather than taking on so much risk acquiring earlier stage companies.
We also review how the size of deposits that have their interest have moved up from simply 1 million ounce deposits to now multiple million ounce deposits. Next we discuss how jurisdiction risk can play into where the majors are focused, and we note the trend back into safer jurisdictions with better infrastructure and rule of law. We wrap up with the benefits and disadvantages for juniors when larger companies take a strategic stake in them for helping fund earlier stage exploration.