Gold Majors Ready to Start Buying Projects Amid Record Margins
The gold majors have paid off their debt and are swimming in cash due to record margins. According to Brien Lundin, editor of Gold Newsletter, this means they will start buying projects to rebuild their pipeline.
Lundin noted that the big producers are making more money than they know what to do with, but can only dividend so much or buy back stock before they have to invest in new projects. The World Gold Council reported an average all-in sustaining cost margin of $3,076 per ounce in Q1, a record and 134% increase from last year.
The gold price has set several records this year, including a high of $5,597 in January, but Lundin believes the next big phase of this bull market will be when the majors start to buy big projects. He pointed out that everything up and down the food chain, except explorers, has moved already.