Geologist Keith Barron: Gold & Silver Below the Cost of Production – Supply Crunch Ahead
Large companies will not be able to replace ounces; companies cutting back, mothballing projects
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In the first of a special FS Insider series on gold, Jim welcomes back highly respected geologist Keith Barron PhD, Founder and Exploration Geologist at U308 Corp. Speaking from Quito, Ecuador, Keith discusses how we are back to where we were in 2001, as the price of gold and silver are below the cost of production. Keith sees a big supply crunch coming as major producers defer or even cancel large mining projects. He laments that in recent years miners were pushed by the banks to do deals at the expense of shareholders. He believes the merger/acquisition phase is now over. Quality ounces are now much more important than quantity ounces. He doesn’t see large producers replacing their ounces and believes some companies may break up. Junior miners are in survival mode. Keith also see the greatest transfer of wealth in history as western gold wealth is rapidly transferred to Asia. Given the carnage, Keith sees the most opportunity in the sector since 2001, as there is very little competition for good projects.