By Carolina Curiel

ScrapMonster Author

Gold Miners Running to Stand Still After Cuts, Franco CEO Says.

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

Gold Miners Running to Stand Still After Cuts, Franco CEO Says

The world’s gold miners will be running on the spot for years to come as a surge in gold prices sends them scrambling to secure new production from less profitable projects, according to the largest mine streaming and royalty company.

“In my mind, the industry is ex-growth,” said David Harquail, chief executive officer of Franco-Nevada Corp.

After a downturn that squeezed capital investments, most gold producers have no choice but to invest in new projects as existing mines are depleted, Harquail said Wednesday in an interview.

They’ll be faced with options that are, cumulatively, unlikely to boost global gold production or lower the sector’s overall costs.

“None of those projects are really great,” Harquail said at the BMO Capital Markets mining conference in Florida. “They would have been built by now if they were.”

As a result, Harquail said Franco-Nevada plans to do more deals in the non-precious metals space, with a particular focus on oil and gas. The company’s mandate allows it to have as much as a fifth of its portfolio outside precious metals, and he would like to deploy capital to get to that level soon. Currently 94 percent of Franco-Nevada’s holdings are in precious metals, he said.

Gold, which posted four straight weekly gains through Friday, has been thrown into reverse amid a rapid rethink by investors about whether the Federal Reserve could move on interest rates this month. The metal extended its losing streak to a third day as signs of a strengthening U.S. economy diminished haven demand. The yield on two-year Treasuries reached the highest Wednesday on an intraday basis since 2009, after eclipsing its 2016 high.

The world’s biggest copper producer has some good news for bulls: it won’t be tempted into speeding up projects as prices rally.

What’s more, Codelco Chairman Oscar Landerretche says a series of natural obstacles facing the industry will also prevent other miners from piling in.

“It’s going to be very difficult for the industry to respond even if it wanted to,” Landerretche said Tuesday in an interview at the BMO Capital Markets mining conference in Florida. “It’s becoming very, very hard to do new projects.”

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-2nd-march-2017