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A P R I L / M A Y 2 0 1 9 www.resourceworld.com 21 mine life, safety of their investment capital and looking to replace ounces in the ground. There just happens to be too many partici- pants in a finite industry. In order to appease them all, there are not enough discoveries. RW: What do dwindling reserves and higher gold finding costs mean for the price of gold? CE: It gets to a point where there's no margin. If it costs you more to find a single ounce of gold to replace a production ounce, that comes right off your top end – your margin. If you are making $200 an ounce and it's costs you $201 to find an ounce of gold, it's a waste of money. Why would you spend that capital? So you're looking for ounces you can make good steady cash flow over a long period of time. Basically, a lot of that is driven by smart producers understanding that they could go through two or three gold cycles in 10 years. As long as they catch those peaks, they make a fortune. RW: But the bottom line is, gold producers don't control the price of metal, do they? CE: No, they don't. Plus, you are dealing with markets that are flooded with paper gold. I don't think any regime really wants gold rocketing through the roof – especially the US. They can interfere. They've done it before. RW: What is your take on the future of gold stocks? CE: Pay attention to companies that find deposits that look like they're going to be economic in an average market. If you can find those deposits, buy those stocks. The days of trading gold stocks are over. It's rare to find a stock that you can buy on a drill hole and sell it the next day. That's not the way I invest. RW: What you're saying is that investors have to be selective? CE: Really selective! Just because you've got a geochemical anomaly in the middle of nowhere doesn't mean that there's a mine underneath it. It's just a soil anomaly and when you drill it, it might have gold in it but can you economically get that gold out of that rock? You'll never know until you get the metallurgy and that takes time. These things are linked to time. You can make a discovery today and it's not ready for full feasibility for seven years. And the more you de-risk your assets, the more interest there is from a producer. n Cal Everett is a geologist with more than 14 years of surface and under- ground exploration experience with senior mining companies. He moved to the financial sector in 1990, and spent 12 years with BMO Nesbitt Burns focused on resource equities, and seven years with PI Financial Corp. in senior resource institutional sales and capital markets. From 2008 to 2015, he was President and CEO of Axemen Resource Capital. Mr. Everett holds a Bachelor of Science degree in Economic Geology from the University New Brunswick. * Resource World does not sell your information to third parties #604-700 W Pender St., Vancouver BC V6C 1G8 Canada online at www.resourceworld.com or phone 1.877.484.3800 SAVE 50% up to Resource World (Print and Digital Edition) 1 Year/6 issues (CAD $24.95) Resource World (Digital Edition) 1 Year/6 issues (CAD $12.95) Resource World International (outside Canada and USA (Print and Digital Edition) 1 Year/6 issues (CAD $99.95) NAME ADDRESS TEL EMAIL