I have touched on how the COVID-19 pandemic is affecting the stock market. Now, we’re seeing it have an affect on the gold mining industry. According to a recent report published on FoxBusiness, one CEO, Mark Bristow, of Barrick Gold, feels that a lot of deal making could be happening in the mining industry.
Could the COVID-19 Pandemic Lead to Gold Mining Acquisitions?
I’ve been covering the gold industry quite extensively since making this website a full time job of mine. I’ve profiled Barrick Gold and their CEO, as they are major players in this space and a stock I really like.
With the pandemic changing society as we know it, it’s also had a ripple effect on the miners, by making some of them put their operations into a care and maintenance mode, which essentially reduces gold supplies. While this happens, governments and central banks are making huge cash infusions into their economies to try to stimulate the economy artificially, which is causing currencies to become devalued and hence, pushing a lot of interest into gold, which has always been a hedge against inflation. (That’s a must read if you are new to learning of gold’s history and value.)
There’s a real opportunity that there might be some acquisition options coming out of this,
-Bristow to FOX Business.
There is a 20 to 30 percent decline predicted in new gold supply over the course of the next 10 years, according to the article.
Barrick Gold owns six of the tier one assets, which are classified as mines that have made more than 500,000 ounces of gold yearly for a minimum of 10 years. They also have many assets that are quickly becoming tier one assets as well. The current ones are located in Nevada, (three,) Africa, (two), and one in the Dominican Republic.
Brisow added that the current situation is similar to the 2008 economic fallout when many deals were made due to the cost of gold surging from $700 to about $1900.
Gold has been up 10% this year, which makes the gold-backed ira account a sexy option for people looking to allocate funds into metals through their retirement.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started this website to share his expertise in using his Self-Directed IRA. Most recently he's been advising individuals to diversify into precious metals ahead of a certain recession. He invested with Goldco.