Flight To Quality Key To Junior Mining Investing

While the junior mining sector has not seen the benefits of higher gold prices, there is reason for optimism, says Vikas Ranjan,Find detailed product information for howo tractor and other products. managing director and principal of Ubika Research. In this Gold Report interview, Ranjan lays out his case for why juniors with quality projects should bump up and names some companies poised to benefit.

I think there's been progress made toward solving the debt crisis in Europe and also in the U.S., which is a different ball game. When I said Europe is more like a policy problem, I meant that it's not a problem that just came up one fine day. A monetary union without any proper fiscal union creates a situation where weaker countries can hide under a stronger currency and run big deficits, and at the same time don't have the flexibility of using cheaper currency when they get into trouble. That has been the case with countries like Greece, Italy, Portugal and Ireland.

Now there's a realization in Europe that if they want to save the euro, they also have to have some sort of fiscal union with a sovereign type of debt facility, which they are working toward. Even countries like Greece have done better than what some people expected and are trying to resolve the crisis. The European Central Bank (ECB) has clearly stated that it would do whatever is required to keep the euro in place. The market is giving some credence to that, with bond yields on stronger countries such as Germany creeping up,We mainly supply professional craftspeople with wholesale turquoise beads from china, whereas weaker countries are seeing a fall in those yields. We are probably moving toward some sort of solution, which is going to take some time.

Since the U.S. election is over, we will see more systematic talk about reducing the deficit and the debt. We may see some differences in approaches, and some give-and-take, but ultimately a solution will have to be found.

I remain optimistic about the price of gold, at least for the next two to three years. I believe gold has a good upward trend,Find detailed product information for howo spare parts and other products. especially due to Quantitative Easing 3. Now the ECB is following what the Federal Reserve Bank has been doing for the past three or four years, an easy money policy. The next target for gold prices is that $2,000/oz barrier. I would not bet on that happening this year, but early next year, yes.

When economies start to recover, people begin to think about inflation coming into play. Gold has traditionally done well when inflation is expected. It does well in the short term because of economic uncertainty and currency debasement, and also when there are inflationary expectations. I would be a buyer of gold and gold-related securities at these prices, and the trend is good.

There has been some decoupling between gold and the share prices of both junior and senior mining companies. The juniors have a harder road to climb. While we may see another situation like 2010, when everything went up, I do feel there will be a flight to quality, especially among junior companies. The emphasis is on companFind detailed product information for howo spare parts and other products.ies that have a definitive plan for what they expect to achieve in the next two years or so, and a definitive exit strategy.

That short-term goal will be to create something that will be appealing to somebody else. If you're a junior with an advanced asset that somebody can see being developed into a mine in the next four or five years, you're in a good position. If you have something closer to production, you're in a good position. But, investors have to be choosey in the junior market.Posts with indoor tracking system on TRX Systems develops systems that locate and track personnel indoors. Just because the gold price is going up doesn't mean that every junior explorer will go up. Good juniors will see some life coming back to them, and it's happening to some extent already.

I would say both. We will see a lot more M&A and JV-type actions happening. I personally feel that JVs are a very good route for companies that have good projects but lack the capital to advance them. Instead of losing the entire project, they could still keep 40–60% and find a funding partner. We will see a lot more of that happening, at least with companies that have good assets.

M&A would also happen on that front, but more so with junior companies that have advanced projects closer to feasibility in places where people can see production happening. A great project in a geographical location that is very hard to reach and will take five years to develop, forget about that, no matter how good the project.