I had the opportunity yesterday to join McEwen Mining‘s Q2 2013 conference call, led by the founder and former CEO of GoldCorp, Rob McEwen. He is now the CEO, Chairman, and Chief Owner of McEwen Mining.
It was an interesting call as usual, with informative commentary on the mining environment in Argentina, and of particular interest—Rob’s updated perspective on gold and gold mining equities.
Regarding his outlook here on gold McEwen stated: “My view remains quite positive…The primary drivers for gold are still there and increasing, and I see no reason to reduce one’s exposure, but more to increase one’s exposure in gold… In the short term, the summer is usually a cyclical low, and you get recoveries in September. Gold prices are going up in September…so you might want to take a look at some of these juniors and intermediates.”
From Tekoa Da Silva, Bull Market Thinking
Speaking towards a presidential cycle he sees occurring in the gold mining equities, Rob said, ”I continue to believe something called the ‘White House Effect’ will continue to play out this year, and [what] that is, is since 1984, there’s been eight presidential elections, and in each of those years the value of gold shares has declined. In the year that followed…gold shares as measured by the XAU index…have increased anywhere from 10% to 80% in the year that followed the election.“
The implication of the “White House Effect” at present according to Rob, is that, “There’s a reasonably good chance that by the end of the year, you’re going to see gold share prices higher than they were at the beginning of the year. So you can see a nice recovery in that space.”
As that recovery occurs, “You’re [also] going to see consolidation taking place…[as] people want to have a little more size in the marketplace. And we’ve been looking in that area as well,” Rob added.
Sharing a comment on gold, Rob said, “My view remains quite positive…The primary drivers for gold are still there and increasing, and I see no reason to reduce one’s exposure, but more to increase one’s exposure in gold…In the short term, the summer is usually a cyclical low, and you get recoveries in September.”
As a final comment to end the conference call, Rob said, “Gold prices are going up in September…so you might want to take a look at some of these juniors and intermediates.”
This was another interesting call with one of the great mine developers of our time. It is recommended listening for precious metals investors and those looking to add to their education in the mining equity space.
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