The Smartest Investors Club
  • Business
  • Politics
  • Investing
  • World
  • Business
  • Politics
  • Investing
  • World

The Smartest Investors Club

Investing

David Erfle: Gold Sector Looking for a Bottom, M&A Needed

by September 28, 2023
September 28, 2023
David Erfle: Gold Sector Looking for a Bottom, M&A Needed

While the atmosphere wasn’t as morose as he expected, Erfle said gold juniors continue to face challenges. Of course, as he reminded investors, it’s easier to pick winners during tough times than in bull markets.

‘Let’s face it — the great projects are always going to get financed, they’re always going to get built. And many of them are controlled by these juniors,’ he said. ‘In bear markets you can always tell the strong companies from the bad companies — you can always tell the wheat from the chaff, they stand out. But in bull markets it’s much more difficult.’

During this time of negative sentiment, Erfle wants to see more M&A activity, especially among single-asset developers. He explained that some of these companies have done a good job de-risking multimillion-ounce deposits in safe jurisdictions, but are stuck when it comes to funding their feasibility studies or construction activities.

‘What I’d like to see is several of these companies merge, so you have one company with a handful of these projects — maybe $150 million, $200 million in the bank, access to capital and also tack on a big board US listing. Then you’re more liquid, you’re more attractive, because there’s only so many checks these financiers can write,’ he said.

In Erfle’s opinion, the big reason gold stocks are struggling is that the gold price has ‘gone nowhere’ for three years.

‘It ran up to resistance at US$2,000 (per ounce) in 2020. That was where it almost ran up to in 2011 — it came US$75 from resistance in 2011. It ran up there again in 2020, and it’s tried to break out two other times. And after each failed breakout investors get more and more discouraged,’ he explained. ‘So with the gold price going sideways and inflation going up so much, the all-in cost of production has gone up — the price to explore, the price to build a mine, everything. All those costs have gone up, yet the gold price has gone nowhere, and stock market continues to go higher as well.’

That said, he sees various signs that a bottom is setting in for the gold sector and pointed to opportunities to pick up stocks. ‘Herein lies the opportunity, and this is why I love bear markets in this sector,’ said Erfle.

Watch the interview above for more of his thoughts on the gold market and juniors.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com
0
FacebookTwitterGoogle +Pinterest
previous post
Who are the Republican presidential candidates at the second GOP debate?
next post
Israel’s Supreme Court convenes to decide on law that could determine Netanyahu’s fate

You may also like

Binding Agreement to Acquire 2D Generation

RecycLiCo Engages Hatch to Consult on Plant Construction...

European Lithium to Acquire Leinster Lithium Project in...

Excellent Progress of Lithium Carbonate Refinery Engineering Study

Electra Secures Federal Support for North America’s Only...

Grid Battery Metals: Exploring Highly Prolific Lithium Assets...

5 Top Weekly TSXV Stocks: Goldbank Mining Registers...

10 Biggest EV Stocks to Watch in 2025

SOURCE ROCK ROYALTIES ANNOUNCES Q2 2024 RESULTS INCLUDING...

Far Northern Resources

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Sycamore Gap: Two men convicted of felling one of UK’s most famous...

    • Putin, Xi and friendly world leaders celebrate Russia’s Victory Day at Moscow Parade

    • Ellen Miles is planting seeds of hope through guerrilla gardening

    • US Policy Momentum, Clinical Progress Fueling Psychedelics Market in 2025

    • China has spent billions developing military tech. Conflict between India and Pakistan could be its first major test

    Categories

    • Business (1,633)
    • Investing (4,791)
    • Politics (7,535)
    • World (6,128)
    • Terms & Conditions
    • Privacy Policy
    • About us

    Disclaimer: thesmartestinvestorsclub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 thesmartestinvestorsclub.com | All Rights Reserved


    Back To Top