CHEAPER FOR MAJORS TO BUY JUNIORS WITH GOLD ASSETS THAN EXPLORE. THE MOVE IS ON. OUT OF BASE METALS INTO GOLD

by: Peter Haggen (note: It may pay to read this entire article, there’s a sting in the tail)

Consolidation of the Australian Mining Industry is just a question of time. With Gold looking like its heading for the stars, why would a major, bother arranging a geological team and looking for drills and accommodation in remote towns, subjecting their personnel to dust and fly in fly out movements, as well as outback flies and associated costs etc. All the majors or others have to do is click the “TAKEOVER BUTTON” and “hey presto”, they have just added a new resource of Gold or hot exploration tenements to their asset list, for peanuts and paper.

DID YOU KNOW A MEAT PIE OR A LB OF BUTTER OR A CUPPACHINO COFFEE COST MORE THAN A LB OF LEAD, ZINC OR COPPER?

There is no question that the hunt has already started for juniors that have promising Gold assets. Gold is the “profit of the future” for Mining Companies. Sure, the big boys have Iron Ore, Zinc, Lead and Copper, but with those base metals go a lot of tiring work and trouble after the mining is done to realise a profit. One million grams of Iron ore is worth $US60 (Sixty dollars) and 1,000,000 grams of Gold is $US70m (Seventy million dollars). With base metals in particular, there is also the cost of transporting massive amounts of mineral concentrates, that carry only a small percentage of the base metals 15-27% metal content. An example, is for the transporting Copper concentrates from, say Broken Hill with 25% Cu content. The miner has to pay the transport, for a whole tonne of Copper concentrate which means 75% of the tonne is waste. So the exact cost to take a tonne of Copper to the ship at an Aussie port, bound for China, is not say $100 a tonne, its actually $400 a tonne because it only has 25% actual Copper content. Then the Concentrate has to be loaded into a ship and sent to China or other destinations. When it arrives at the destination, the miner has to pay for the smelting of the concentrates. If one (1) tonne of concentrates are smelted, but after smelting the concentrates the miner, only gets paid for 250kg because the rest (75%) is slag or waste. The smelting has a “term name” and is referred to as, “TC” which means Treatment Charge. After the smelting is completed, the metal is put into a block of copper, then has to be dissolved in sulphuric acid and electrowinned into pure 99.99% Copper blocks. This is called “refining cost” or “RC”. So the costs for TC/RC is currently $100 tonne for TC and $0.12/lb for RC. So these costs have to be added. Then, when that’s done the buyer wants a discount to the LME Copper price usually +5% discount, so that also comes off the miners profit. So all these additional costs to base metals, added to the miners processing costs at their Australian plants, makes you wonder, why bother? Hello Gold!

THEN LOOK AT HOW EASY GOLD IS!

Easy to process, easy to handle, easy to sell, massive margins. For base metals Mining Companies the biggest costs are in personnel, transport, administrative, corporate and costs in smelting and refining and after that finding a buyer. The margins in base metals and fluctuations of prices drives them crazy. The base minerals industry works on making a profit of CENTS PER POUND The Gold Industry makes a profit of “DOLLARS PER OUNCES”. One tonne of Gold is worth $A70 million. Zinc metal 99.99% Zn, at the moment is priced on the LME at $A3,403 per tonne, or $0.10c per ounce. That is ten cents per ounce. Not a typo.! The cost to get it out of the ground and process: Zinc versus Gold is about the same cost, yet one is worth $0.10c an ounce and the other $2,200 an ounce. and its easier to process.

Gold is simple to process, simple to transport and simple to sell. None of the extra ridiculous charges that base metals have to contend with. EVERYONE WANTS GOLD. The Base Metal is always about a constant squabbling exercise, on price and having to have offtake agreements in place and having to arrange ships and trucks for transport and all the “heavy lifting” costs associated with such a mundane and costly and unrewarding project.

WHO IS REALLY RUNNING THE GLOBAL WORLD? (HERE YOU REALLY FIND OUT)

THE STING IN THE TAIL

Mining Companies that have long been associated with base metals are now starting to look afield for juniors that have promise, great exploration prospects or resources already proven. The Consolidation of the GOLD SECTOR IS GOING TO BE A REVOLUTION LIKE NEVER SEEN BEFORE. FIRST IN BEST DRESSED AS THEY USED TO SAY. Cashed up base metals miners are already on the hunt for Juniors, the eagle and the mouse jostling is about to start. These revolutionists thoughts, are not just the author of this article, but the thoughts of all the major institutions, commentators and brokers across the globe, saying to base metal producers, Gold is the future. Sure we are going to need Copper, Lithium and Cobalt and other base metals in the future as the world goes electric, but its not worth mining at these prices. THE STING: The base metals prices are controlled by the LME, London Metals Exchange. What a lot of people do not know is that, THE LONDON METALS EXCHANGE NOW BELONGS 100% TO CHINA (via HONG HONG, HKSE) The Hong Kong Stock Exchange purchased the London Metals Exchange and now control all the base metal prices so the prices of these commodities, are going nowhere. Now the Hong Kong Stock Exchange has bid $US35 Billion for control of the LONDON STOCK EXCHANGE, only in September this year, only days ago. Now take this into account, basically China (via HK) will then control the costs and prices of not only the Base Metals, but by doing that effectively can cap the prices of base metal miners listed stocks on the LSE, by controlling the base metals prices. The next step would be to reduce the prices of Base Metals (ON THE LME) which would reduce the prices of the LSE mining companies and take them over at a discount. THE PRICE OF BASE METALS ON THE LME IS CONTROLLED BY THE “COMPANYTHAT OWNS THE LME. (CHINA) Sounds like a conspiracy????YOU CAN BET ON IT.

Goldman

Read Previous

NML-NAVARRE MINERALS INCREASE THE HUNT FOR GOLD AT STAWELL

Read Next

MGV – MUSGRAVE MINERALS SECURE EARN-IN JV WITH EVOLUTION FOR $1.5M FOR CUE PROJECT AND TIPS $1.5M INTO MUSGRAVE COFFERS.

Leave a Reply

Your email address will not be published. Required fields are marked *