The Yellow Metal Opportunity
In 2024, we live in troubled times and in troubled times, gold has always been a stabilizer. It’s been around 5,000 years and a store of value since early history. Since the US Dollar went off the gold standard in 1971, the demand for gold has increased, not only as a store of value, but increasingly in industrial applications such as nanotechnology for the aerospace and medical technology industries and, of course, gold jewelry with its worldwide presence. Gold is of course, not a commodity, but a naturally organic metal found in either a natural state in alluvial reserves, or processed from gold ore formed millions of years ago. As a naturally occurring metal, gold is a finite resource and as an active synthetic market (gold futures) has been developed by financial institutions, the size of the futures market in gold has grown to a multiple of actual physical gold reserves.
As a result, the gold price has, over the past several years, been manipulated by institutions and central banks to avoid a price “blowout” of physical gold. Given recent global inflationary pressures, the collapse of the Chinese economy, following its over aggressive Covid policies, combined with ongoing wars in Ukraine and the Middle East, and with China’s hegemonic actions in the South China Sea and aggression towards Taiwan, we are experiencing a unique “perfect storm” of economic and political headwinds. The global geopolitical state is more fragile and fraught than any time since WW2. This fragility and investor nervousness has led to a breakout of the gold price over the past months to over US$2,000/oz. with every sign pointing to a continuation of this trend as professional price manipulation is overcome by increasing global panic.
When stock markets and real estate crashes, gold will still be there. When inevitably highly risky cryptocurrencies crash, gold will still be there. It may not be fashionable. But it’s been the go to store of value for over 5,000 years and will continue to be so.
Gold Mining Companies Potential Opportunities
Gold, with its enduring allure and timeless value, stands as a stalwart investment, and channeling that investment through gold mining companies unveils a multifaceted avenue for leveraging this precious metal’s intrinsic worth. Beyond being a tangible asset, investing in gold companies provides investors with a strategic foothold in the dynamic world of gold production.
Choosing to invest in gold mining companies isn’t merely a passive engagement with the safe haven store of value; it’s an astute manoeuver that taps into the very essence of gold’s enduring significance. These companies don’t merely hold gold; they actively engage in the extraction and production processes, thereby embodying a direct link to the heartbeat of the gold market.
The beauty of investing in gold mining companies lies in the dual nature of the returns it promises. Not only does it grant exposure to the intrinsic value of gold, a historical hedge against economic uncertainties, but it also opens the door to reaping rewards from the operational efficiencies of the mining entities. Through investments in these companies, investors position themselves to capitalize on the anticipation of gold production at optimized costs, fostering the potential for enhanced profitability.
Moreover, gold mining companies offer a unique advantage by providing investors with a diversified portfolio within the broader precious metals sector. This diversification mitigates risks and adds resilience to the investment strategy, aligning with the fundamental principle of spreading risk for more robust, long-term returns.
Brookmount Gold Corp Opportunity
Stability:
Brookmount Gold’s Properties are located in Indonesia, a secular, diverse nation with a predominantly Muslim population, yet the region where we conduct operations is predominantly Christian. The country is a thriving democracy with a population of over 160 million and a massive land area comprising the 2 main Provinces of Java and Sumatra together with the very large island of Borneo. Indonesia is one of the worlds leading gold producers and has, over the years attracted the world largest gold mining companies such as Newmont/Barrick, which as originally responsible for developing the are of Alason in Sulawesi Province where Brookmount’s heap leaching operations are located. Despite its religious diversity, Indonesia is characterized by stability, both in terms of its religious and political landscape and operating as a democratic state. Various political parties contribute to the democratic process, fostering a stable and secure environment for our operations.
Productivity:
Because of our high efficiency, we produce gold in a very low-cost environment, particularly in Southeast Asia. These efficiencies keep us profitable and allow us to continue to grow. Our average production cost is probably around $500 an ounce and the current gold spot price is north of $2000. Thus, Brookmount has excellent operating margins and they keep on improving year over year.
Consistency:
We manufacture within a cost-effective setting where the production cost of the identical product remains consistently low. The quality of the product remains constant; whether it is refined to 99.9% purity or less, gold will consistently exhibit the same standard, unaffected by its geographical location.
Diversity:
We have expanded our primary platform by acquiring assets in North America, intending to expedite their production. These assets are of high quality, boasting substantial reserves, and operate within the North American production environment. This strategic move allows us to mitigate risks significantly, as our assets are situated in a developed country.