Gold Miners and Explorers Face Serious Supply Problems

Major gold mining companies are facing a dilemma—declining production as the gold price is hitting record levels. Junior gold explorers are confronting a similar dilemma—fewer legitimate exploration properties with the real potential to host a major economic deposit. This unique set of circumstances means that the rare micro cap company that discovers a meaningful gold deposit is immediately in the sights of the cash-rich gold mining companies in need of new reserves. More importantly, anyone owning this junior company stands to make a substantial profit. Exploration success comes from being in the right place Geologic success can only come about if a company is exploring in the right geologic terrain—a terrain that is capable of hosting a major deposit. This is of course easier said than done and it is critical that the speculator in this sector be able to recognize the difference between a legitimate play and a questionable story.

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