Issue link: http://resourceworld.uberflip.com/i/661612
20 www.resourceworld.com A P R I L / M A Y 2 0 1 6 i n s i g h t s & i n v e s t m e n t s B a r r y M u i r I 've been trying to figure out gold for years. It hasn't been easy to wrap my head around its complexities or how it fits into the world today from an investment perspective. I became a financial adviser in the 1990s and just when I thought I knew it, things changed. Gold, being actual money, is an important form of wealth that plays a unique role in the world's financial system. The average grade of the precious metal mined throughout the world is 2 grams per tonne which fits onto the head of a pin. It has functioned as real money as far back as 600 BC. They say most of the gold ever mined is still accounted for with about 185,000 tonnes in existence today, above ground. Of world consumption approximately 50% of gold produced today is used for jewelry, 40% for investment holdings and 10% for industrial use. In the past, a gold standard was used in the implementation of monetary policy that helped create a somewhat level playing field between nations and their respective currencies. During the 1930s, the minting of gold coins ceased for a circulating currency and in the 1970s, the world gold standard was abandoned for a fiat currency system where the US dollar became the standard for which other country's currencies were measured. Owning gold bullion, coins or bars has always been an impor- tant safe haven for wealth and an important hedge against inflation or other economic disruptions. The price of gold typi- cally moves inversely to the dollar. As the European Central Bank attempts to stimulate their econ- omy using such monetary policy as negative interest rates, we have more reasons to see the price of gold appreciate as wealthy Europeans look for alternatives to low-interest bank savings and mainstream stocks that are seeing prices begin to slip with a weakening economy. Over the past year gold prices have increased close to 20% at the same time the S&P is down about 1.60%. Technically, gold is holding some vigor as we look for a breakout above US $1,280/oz. Fundamentally, the price of gold looks promising as we watch a fractious US political system come unglued. The recent strength in the gold price has not only been great for gold producers but it's breathing new life into some of the smaller cap gold companies that could prove to have tremendous value after sitting at their lows for the past few years. Here are a few com- panies at various levels with proven assets that could benefit in the coming months from further stability in the price of gold. Marathon Gold Corp.'s [MOZ-TSX] flagship property, Valentine Lake, is in western Newfoundland. The property has a measured and indicated resource of 1,060,100 ounces grading 2.20 g/t gold and an additional 200,000 ounces inferred grad- ing 2.85 g/t gold. Only 10% of the 18-km gold system has been explored in great detail with many new drill targets having been selected. The Valentine Lake deposit has four open pits and is open along strike. The 2016 metallurgical pro- gram has started with the testing of drill core samples. Valentine Lake is one of the few above-average open pit deposits in Canada not yet controlled by a major or intermediate mining company. Midas Gold Corp.'s [MAX-TSX; MDRPF- OTCQX] 2014 pre-feasibility study on the Stibnite Gold Project in Idaho demonstrated potential for a large-scale, long-life, low-cost open pit gold-antimony mine that stands out from its peers. Three deposits host total prob- Select gold stocks catching investors' interest Eira Thomas, President and CEO of Kaminak Gold Corp., discusses exploration of the Coffee gold project located 130 km south of Dawson City, Yukon. Photo by Kathrine Moore.