The mining life cycle
I think it's worth a refresher because, without getting overly technical, it's important to understand the different stages resource companies go through. It also helps you identify the potential pitfalls of investing in a company depending on its current stage.It's helpful for you to understand the basics of how silver is discovered and eventually mined. Silver investments at each stage come with their own risks and rewards.
Many thought it was a risky, even crazy idea to reveal so much proprietary data. But McEwen ignored the critics, and it worked. A cash prize of $575,000 was enough to generate 1,000 submissions. A 3D map of the mine generated 110 deposit sites, half of which Goldcorp didn't previously know. And that led them to $6 billion of gold, making Goldcorp extremely profitable.
If ongoing drilling continues to produce strong results, more speculators get drawn in, bidding up the share price. Eventually, if sufficient drilling demonstrates enough silver to make for a valuable economic deposit, the share price may reach a medium-term peak. Then, as the discovery becomes more widely known, early investors start to sell or take profits. This stage can last several years.This stage requires a lot of money to put the deposit through detailed studies.
The exploration and development stages may occur during a strong bull market. When that's the case, and metals prices are rising significantly, this typically adds to rising values. Investors are willing to pay more for the possibility that future mining profits will be even higher.Deciding to build the mine is a big deal. It takes large investments, often in the hundreds of millions and even into the billions of dollars. A whole lot of effort is needed to eventually reach this point.
Timelines and budgets have to be closely tracked and respected to avoid the risks of delays and overspending. Naturally, extracting the ore depletes reserves. Many producing mines have ongoing exploration efforts around or near the existing orebody to search for more mineable ore. Ideally, they find enough metal to replace the extracted ore and extend the mine life to several decades and even beyond.If insufficient additional reserves are found, or if metals prices fall significantly for an extended period, this may lead to eventual closure.
So, you need to know these three letters: ESG. They stand for"environment, social, and governance." And it's how today's successful mining companies run their businesses.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stocks steady while metals smashed - What gives?!Kitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.
Read more »
The cost of free gold and silver researchKitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.
Read more »
WGC says central bank gold demand hit an all-time high in 2022Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices
Read more »
Stocks go gaga; gold's (foreseen) falling sagaKitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.
Read more »
A triple whammy for gold: what now?Kitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.
Read more »
Strong China demand boosts gold rallyKitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry.
Read more »