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A P R I L / M A Y 2 0 1 9
seniors with juniors) in order to have producing mines in the
years to come?
CE: I don't think they're forced to do anything. Once you go
in through the M&A process of two companies coming together,
you look at each other in detail and if the sum of the two is a
negative, nobody's forcing anyone to do anything. If the sum of
the two is a positive, then it's a positive M&A type transaction.
Because of lack of foresight of making sure you have a 10 to
15-year mine life and you don't explore for seven years, by the
time you find one, it takes another 10 years to get into produc
-
tion. There's a bind right now where there's not enough deposits
to replace mineral deposits that are being mined out.
RW: Are gold explorers and miners starting to shun countries
with a high geopolitical risk due to the possibility of nationaliza-
tion, super royalties and civil unrest?
CE: That's a fact. No shareholder wants an unexpected fiscal
shock of something that they did not expect that affects the net
free after-tax cash flow from whatever jurisdiction they're in.
Thus, shareholder bases are actually pushing exploration com
-
panies or producers to where they think there's a stable taxation
policy. That's why there's so much interest in the United States
and Canada.
RW: What do you mean by: "There are too many gold pro-
ducers?" Why is this bad? Can't the market absorb more gold
production?
CE: They don't have the production to mine. Good deposits are
all tied up – the ones that are being mined right now. There are
11 seniors and 25 intermediate public companies that produce
300,000 to 1,000,000 ounces of gold a year and there are 33 junior
producers that could do 30,000 up to 300,000 ounces.
When you're dealing with that gross number of producers,
they're all looking for the same thing. They're all looking for
GOLD
