Make Kitco Your Homepage

'They're making a lot of money' - Paul Harris says current gold price still favors miners

Kitco News

Although gold prices are down from the start of the year, miners still have healthy margins at the current price levels, noted Kitco correspondent Paul Harris.

In February Harris recorded Kitco Roundtable at BMO Global Metals, Mining & Critical Minerals Conference with Mining Audiences manager Michael McCrae and Adriatic Metals CEO Paul Cronin.

Adriatic Metals (ASX:ADT) will commence production at its Vares silver project in Bosnia & Herzegovina in Q3 of this year. Adriatic describe Vares as one of the highest margin polymetallic projects globally. Post-tax NPV is estimated at $1.062 billion and IRR at 134%.

After gold got as high as $1,960 ounce in January, Harris noted that the BMO conference opened in late February with the metal suffering a four-week slide dipping into the low $1,800 range.

"Perhaps [the drop is] a little bit painful, but the producers...still have 40% to 50% margins," noted Harris. "They're making a lot of money."

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.