Rob McEwen: Gold's Price Potential is North of US$5,000 Now

TL;DR

Mcewen Mining faced challenges due to the COVID-19 pandemic, with operations shut down temporarily and reduced productivity. However, they are gradually returning to normalcy, but uncertainty remains due to government restrictions and increasing COVID-19 cases.

Transcript

i'm charlotte macleod with the investing news network and here today with me is rob mcewen chairman and chief owner at mcewen mining thank you so much for being here online with me today thank you charlotte pleasure to be here it's great to be speaking with you you know i think the last time we spoke was in march or april which was just after the r... Read More

Key Insights

• 🧑‍⚕️ COVID-19 forced Mcewen Mining to prioritize employee health, resulting in temporary operational closures and reduced productivity.
• 🏅 The closure negatively impacted gold production and increased costs per ounce, but the company is gradually returning to normalcy.
• 📢 Management changes focused on cost per ounce and valuable material, aiming to improve operational and financial performance.
• 🏅 Factors like COVID-19, the U.S. election, global economic uncertainty, influential investors' endorsement of gold, and monetary expansion contribute to the increased demand for gold.
• 👀 The gold sector has seen acquisitions, with senior producers looking for growth opportunities in juniors and intermediates.
• 🫰 Gold has outperformed major stock indexes and has the potential to attract smaller investors.
• 👋 This may be a good time for companies to make acquisitions, depending on their risk profiles and desired investment strategies.

Questions & Answers

Q: How did Mcewen Mining handle the impact of COVID-19 on their operations?

Mcewen Mining prioritized employee health and safety by temporarily closing down operations. They are gradually resuming operations, but government restrictions and increasing COVID-19 cases pose uncertainties.

Q: How did the temporary closure affect Mcewen Mining's production and costs?

The closure resulted in decreased gold production and increased costs per ounce during Q2 and Q3. However, in Q3, costs are decreasing and production is increasing, showcasing a return to normalcy.

Q: What changes were made in management during this difficult period?

Mcewen Mining made several management changes, including the addition of Peter Ma as President and a new CFO. They also asked senior management to focus on cost per ounce rather than cost per ton, prioritizing valuable material.

Q: What are the main drivers for gold's price movement in 2020?

Factors like the COVID-19 pandemic, the U.S. election, and global economic uncertainty contribute to a market of increased gold demand. Influential investors endorsing gold and the expansion of money supply also play a significant role.

Q: Are smaller investors entering the gold market based on the actions of big-name investors?

Gold has outperformed major stock indexes in recent years, arousing interest from smaller investors. The rotation of investments from senior gold stocks to intermediates and juniors is expected, especially with positive momentum in the sector.

Q: What trends in the gold space should investors be aware of?

The gold sector has seen several acquisitions due to higher gold prices. Senior producers are looking into exploration opportunities and junior explorers for growth. The current market offers opportunities for acquisitions and growth-oriented investments.

Q: Is now a good time for companies to make acquisitions?

The market is still relatively early in the cycle, making it a potential suitable time for companies to make acquisitions. Investors should consider their risk profiles and explore opportunities in royalty/streaming companies, seniors, intermediates, juniors, and turnaround situations.

Q: What is Rob McEwen's price potential for gold during this cycle?

Rob McEwen believes the price of gold could exceed $5,000 due to global monetary expansion, increased debt loads, and uncertainty. The response to COVID-19 has been extensive and will likely contribute to a significantly higher gold price.

Summary & Key Takeaways

• Mcewen Mining closed down operations temporarily to prioritize employee health and safety during the COVID-19 pandemic. Some operations are now functioning at reduced capacity due to government restrictions.

• The temporary closure resulted in decreased gold production and increased costs per ounce. However, costs are decreasing and production is increasing in Q3, indicating a return to normalcy.

• The company underwent management changes, emphasizing cost per ounce and focusing on valuable material. They are optimistic about improving operational performance.