Resource World Magazine

A P R I L / M A Y 2 0 1 9 www.resourceworld.com 19 in the long run? CE: It's bad in the long run unless the price of gold goes higher. Then you're going to get more net after-tax free cash flow. That's going to save the balance sheets of companies. They need the gold price to go higher. RW: How do politics and economics affect the price of gold? CE: My 25 years of studies show a loss of influence. It used to be that if there was a problem in the Middle East, the price of gold would go up, but since 911, the price of gold has a tendency to fluctuate higher on politics if you punish the rich but not punish the poor. It really is more a trade in association with the US dollar and curren - cies rather than due to massive geopolitical swings. RW: How do declining GDPs, the astonishingly high sovereign debt levels and stagnant interest rates affect mining stock prices? CE: If you chart it, we haven't seen interest rates this low since 1930. There's so much debt in the world that you can't borrow anymore. If you can't borrow any - more and you can't repay your debt, then people look for another source of invest- ment and that drives the price of gold higher. RW: And then the ripple effect to min- ing stock prices? CE: That's correct. RW: If 85% of stock trading volumes are done by computerized trading, doesn't that create an unfair playing field for indi - vidual retail investors? CE: Absolutely, because if only 15% of the investors are talking on a 'voice-to- voice' basis to somebody who gives them advice, you're trading with a computer that could over-balance the buyer on the 'south side' of the trade and won't give the investor a fair market evaluation. That's why you've seen so much volatility in the markets recently. RW: What can you tell investors to do to counteract this unfairness? CE: Find an investment advisor who understands mining. RW: Why has the discovery cost of gold risen from $14/oz in the 1990s to $174/oz today? CE: Because we haven't been exploring as much since 2012. We were really good explorers from the 70s into the 2000s. If minerals are exposed on surface, we've pretty much looked at it except for a few spots in the world. Now we have to go deeper to find hidden deposits. This is true for the gold and copper market. Copper is one of the toughest industries right now in which to find a new discovery. RW: With the top gold producers fac - ing declining production, how will they replace dwindling reserves? CE: They have to do what Randgold and Barrick have just done – look at mergers or partnerships. They have to take other com - panies assets in some way to try to replace mine life. If your deposit has a five-year mine life, big companies don't want them because they're no good for their balance sheets. They need a minimum of a 10-year mine life and they need a minimum 100,000-ounce gold producer in a stable jurisdiction to justify any acquisitions. RW: Perhaps I could divide this ques - tion into juniors and majors. Is less money being currently spent on gold exploration than in the past? CE: Yes, the industry stats from dif- ferent sources say on average that money spent on exploration is down by two- thirds since 2012. RW: Is that by juniors or seniors? CE: Both – juniors and seniors. Explorers, junior miners, senior miners – exploration is down. RW: Are gold producers being forced to merge (both seniors with seniors and GOLD Liberty Gold plans Black Pine drilling Liberty Gold Corp. [LGD-TSX; LGDTF- OTC], part of the Oxygen Capital Corp. group of resources companies, is focused on exploring the Great Basin of the western United States, a region of large-scale, open pit gold mines. The company's flagship projects are Goldstrike, Black Pine and Kinsley Mountain, all of which are past produc- ing open-pit mines with potential for significant further economic mineral- ization to be defined. The company recently received approval for a plan of operations at the Black Pine Project located in southern Idaho. Black Pine is a past-producing, run-of-mine, oxide-heap leach gold mine that contains a large, shallow, district-scale, Carlin-style sedimentary rock-hosted gold system. The permit will allow up to 49 km of new roads and 370 drill pads to be constructed, subject to a staged annual reclamation plan. The main gold zone encompassing the historic Black Pine Mine can be accessed year- round, weather and road conditions permitting. A previously granted plan of operations allows Liberty Gold access to an additional 71 drill sites. Weather and snow conditions permit- ting, drilling is expected to commence in Q2 2019, and continue through early November. Approximately 16,000 to 20,000 metres of reverse circulation drilling in 80 to 100 holes are planned. n I DO NOT BELIEVE IN PEAK GOLD BECAUSE SOME MINES MAKE MONEY AT $1,000 AN OUNCE WHILE OTHERS DO NOT MAKE MONEY AT $1,300 AN OUNCE. IF GOLD GOES TO $1,500 AN OUNCE, THOSE $1,300 OUNCES ARE NOW ECONOMIC.

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