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These Stars Set The Example In A Struggling Gold Industry, Said CEO

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(Kitco News) - The gold mining space is facing a major cash crunch, and besides waiting for the price of gold to alleviate pain, the key to survival may be to look at the senior producers who are managing costs efficiently, this according to Cal Everett, CEO of Liberty Gold.

“The sale side of the industry is still fractured. So if you wake up in the morning and look at the volumes on 50 or 100 juniors, 20 of them won’t even trade for an hour and a half. That’s the nature of the market, but there’s volume on the big producers,” Everett told Kitco News on the sidelines of the 121 Mining Investment conference in New York.

Everett said that senior producers’ production profiles and balance sheets are good examples of how successful miners are run.

“If you go look at AngloGold Ashanti, and you go read their last quarter, they’re selling their South African assets, but they have an all-in sustaining cost for ounces of 12% of their production in South Africa, at $1,197 an ounce. All the rest of Africa, Ghana, Mali, the Americas, Australia, where they get 21% of their gold production, their all-in sustaining costs are $925-$930 an ounce,” he said, “so when they take those assets off and they sell them, someone’s going to buy them in a rising gold market, their all-in sustaining costs are going to get down to roughly the exact same range where Barrick and Newmont are, so that stocks’ a good company.”

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