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The big difference between now and 2008

Kitco News

Elevated gold prices and cheap oil make the aftermath of this financial crisis possibly rosier for the precious metal miners, said Joe Mazumdar.

The editor and analyst of Exploration Insights spoke to Kitco on Tuesday.

Many miners are facing operating restrictions. About one-third of the senior gold miners on the NYSE have withdrawn guidance. Mining has shut down in Quebec and South Africa altogether.

The dislocation businesses and communities are facing staggering. But when COVID-19 restrictions are lifted, Mazumdar said margins for the seniors could see them do quite well.

"The precious metal companies'...balance sheets are actually better. They've been generating free cash flow. So that combined with oil at $30, which can be a significant cost factor for some of these companies, suggests that they could actually do better on the margins this year than they could have done last year," said Mazumdar.

Listen to our conversation with Joe Mazumdar.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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