The Cove Gold project represents one of the highest-grade undeveloped projects in Nevada, says its owner, Premier Gold Mines of Thunder Bay. In 2018, the company announced a preliminary economic assessment indicating strong economics for the project. The Battle Mountain area in northern Nevada has produced numerous high-volume gold and silver mines in the past.It’s no secret that the mining sector has been a bad place to invest for quite a while.
Mr. Stein identifies supply as a key factor that is set to boost the mining sector. “Mines haven’t been built in the last several years, so shortages are arising in basic materials.” He says zinc is experiencing shortages now, and copper and nickel will experience similar shortfalls in the next two to three years. “It takes about five years to build a mine, so it’s easy to see supply shortages ahead.
The third step is to look at the management team, including their track record and how disciplined they are with using shareholder money. Interest in the gold sector has also been sparked by major activity at the top end: Canada’s Barrick Gold Corp. combined with African miner Randgold Resources Ltd.; then, Denver-based Newmont Mining Corp.’s made a $10-billion bid for Vancouver’s Goldcorp Inc.; followed by Barrick’s somewhat hostile and surprising bid for Newmont. Mr. Mazumdar expects these megadeals to lead to divestitures – assets being sold by the newly merged giants.
Mr. Mazumdar then considers the quality of the company’s management. He looks for a track record of finding and developing the best assets, and experience in attracting offers for those assets.
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