Rob McEwen: "Hold On" for What's Ahead for Gold | Summary and Q&A

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August 9, 2019
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Investing News
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Rob McEwen: "Hold On" for What's Ahead for Gold

TL;DR

Rob McEwen discusses the performance of McEwen Mining, the optimistic outlook for gold prices, the correlation between gold and silver, and the potential impact on the company's profitability.

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Key Insights

  • 🛀 McEwen Mining struggled in Q1 but showed improvement in Q2, with expectations of better performance in the second half of the year.
  • 🏅 The gold market is currently at a six-year high, and there is optimism that gold prices will continue to rise, potentially reaching the 1700s.
  • 🏅 Silver prices have a correlation with gold prices, and if gold prices increase, it is expected that the silver-to-gold exchange ratio will compress, potentially boosting mining profitability.
  • 📰 McEwen Mining has an aggressive exploration program, which will result in resource updates, new feasibility studies, and a constant stream of news.
  • 🏅 The market may see more mergers and acquisitions as the gold market is still fragmented, but there could be a slower pace in divestments by major miners due to higher gold prices.
  • 🧑‍🏭 Factors such as pension plan concerns, geopolitical turmoil, and the upcoming election may influence the gold market.
  • ✋ The upward trajectory of precious metals prices may continue, with gold potentially reaching higher price levels, such as $14,000 to even $21,000.

Transcript

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Questions & Answers

Q: How did Q2 performance compare to Q1 for McEwen Mining?

Q2 showed improvement for McEwen Mining after a challenging Q1. The company expects better operations and has an aggressive exploration program.

Q: What factors contribute to the optimistic outlook for gold prices?

Factors such as negative yield sovereign debt bond issues, slow-moving broad market, and the outperformance of gold stocks compared to Dow and S&P suggest a positive outlook for gold prices.

Q: Is there a correlation between gold and silver prices?

Yes, there is a high correlation between the movement of gold and silver prices. When gold prices rise, silver prices tend to rise as well.

Q: How does the upward momentum in silver prices affect McEwen Mining?

The upward momentum in silver prices would have a positive impact on McEwen Mining due to the company's high beta, indicating that its stock price tends to move higher than gold prices. However, the company's stock is not a conservative gold investment.

Summary & Key Takeaways

  • Q1 2019 was challenging for McEwen Mining, but Q2 showed improvement and the company expects better performance in the second half of the year.

  • McEwen Mining has an aggressive exploration program, which will result in resource updates, new feasibility studies, and a constant stream of news.

  • The gold market is currently at a six-year high, and there is optimism that gold prices will continue to rise, potentially reaching the 1700s this year.

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