Gold Won't Be Unloved When Equites Correct - Rob McEwen
(Kitco News) - The recent volatility in the gold market, with prices unable to hold recent gains, has been frustrating for investors, but one major gold executive says to keep the faith as gold’s safe-haven role could soon be tested.
Rob McEwen, famed gold executive and chief owner of McEwen Mining (NYSE: MUX, TSX: MUX), said that while the stock market, with prices near record highs, seems like an exciting place to be, he is concerned that investors are not paying attention to looming risks in economy.
He added that he continues to see gold as the ultimate safe haven against a correction in equities and a weaker currency.
“Everyone is diving feet first in the broad market but there is still more debt to come along,” he said. “I believe the currency continues to be debased and at one point people are going to turn to gold.”
McEwen added that he still sees the gold mining sector, which has been unloved by investors for years, offer the best investment opportunities. He questioned that with current valuations, how much higher prices can go.
“I think gold and gold stocks still have a quiet of bit of upside and we need to look past this short-term volatility,” he said.
McEwen added that his company continues to position itself to become a leader in the sector as it works towards its goal of being included in the S&P 500.
Next year is expected to be a busy one for McEwen mining as it looks to develop its Gold Bar property in Nevada, as the permitting process is close to being finished and construction expected to start before the end of the year.
At the same time, the company is planning to increase its gold production in 2018 with its recent purchase of the Black Fox property from Primero Mining Corp. The mine is expected to produce 50,000 ounces next year; however, McEwen added that the property includes a mill, which will support and process ore from its Lexam VG project. The two projects are located 28 miles away from each other in the Porcupine-Destor gold belt in Timmons, Ontario.
“With Black Fox, we have acquired another 11 miles in prime real estate for gold.” he said. “Timmons has lots of gold and I think there is potential for further growth of Black Fox mine.”
McEwen’s comments come as the company announced that it produced 29,047 gold equivalent ounces in the third quarter. For the year, the company has produced 91,364 gold equivalent ounces, down slightly from 114,009 gold equivalent ounces produced during the same time last year.
In its third-quarter production results, the company provided guidance for next year, expecting to produce between $172,000 to $185,000 an ounce.