Wednesday, January 13, 2010

Prominent Mining Executive Says Gold Will Eventually Go To $5,000

Rob McEwen is one of the most well respected professionals in the precious metals business.  He built Goldcorp into one of the world's biggest gold mining companies, with the lowest mining cost per ounce.  Now he runs the junior exploration mining company, U.S. Gold.    When I first got into this sector over 8 years ago, Goldcorp was a $2 stock.  It's now over $40 and pays a monthly cash dividend.  I think it's safe to say that McEwen's views should at least be taken into consideration and respected.

Rob was interviewed on Bloomberg yesterday and said he believes gold will hit $2000/oz in 2010 and eventually hit $5000/oz. in the 2012-2014 timeframe.  I know a few years ago McEwen was the first visible mining executive to call for $1000 gold.  This interview is short and worth watching (kudos to Ed Steer at Ed Steer's Gold & Silver Daily):       VIDEO LINK

12 comments:

  1. Dave have you seen Bill Still's documentaries, The money masters and Secret of Oz? I agree with him that switching over to a pure gold backed currency would be a terrible move at this point in time, mainly because never before has the world's gold wealth been so concentrated in so few hands; namely the Rothschilds. Putting my personal gold bug biases aside I have to agree with him, that its not what backs our currency but who controls its supply.

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  2. It is nice to see a mining executive come out and call for 5K Gold. However, I am of the belief we will see 5K Gold this year simply because the demise of the USD is imminent.

    Joe M.

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  3. So is US Gold another $2 stock that's going to $40?

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  4. anliu - have not scene Still's work, but there's certainly some merit to that idea. I don't know what the final solution will be, but it should include gold as part of the equation. Clearly, Governments can't be trusted to operate w/out a currency anchor.

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  5. @Joe: dollar demise is on the horizon, not sure if happens this year. one thing i've discovered is that collapses take longer than i expect. I thought housing would collapse in 2005 LOL

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  6. @Anonymous: I don't know. When McEwen took it public a couple years ago it zoomed up to like $8 because of his reputation. I haven't really looked closely at it and I do not own it so I can't speak intelligently as to the fundamentals. I did do a "drive-by" look at it several months ago and it looks like there's potential.

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  7. Au/Ag still looking resilient, but so is this market rally. INTC beating earning big (and a increase of 10X 40 cents/share vs 4cents/share a year ago!? Hows that happen?) will probbaly drown out all the other bad news.

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  8. gyc, i don't even bother looking at INTC's numbers anymore. there's so much channel-stuffing going on in the tech industry that it's impossible to tell for sure what's real and what isn't. I didn't look at the news release, but unless they're selling a lot of product in Asia the numbers are bullshit. You see the retail sales numbers? Strip gasoline inflation out of that and they were a complete disaster. people were'nt loading up on computers in thsi country.

    they may have gotten a boost from selling netbooks. but another trick they do, and i've seen pics of this, they recognize sales when a shipment leaves port on a ship, so what they do at the end of the qtr is load up a lot of "slow boats to China" and that product is counted as sales.

    The economy is absolutely collapsing. My buddy told me his parents were in Atlantic City earlier this week for an annual mid-week trip to Harrah's because they get a comp room and they said AC was an absolute morgue. They've never seen it like this. Gaming is a direct barometer of economic health.

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  9. Dave,
    my favorite quip from the INTC CFO:
    "Smith said Intel had not yet seen signs that big companies are feeling freer to replace their old PCs, but that he expects it to happen this year."
    Well I have been "expecting" to win the lottery for a while now but no dice! At least he is CONfident.

    Oh yeah,
    FNM/FRE bailouts to cost more than Iraq and Afghanistan combined.

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  10. FNM/FRE will ultimately cost at least a trillion, I bet.

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  11. Anyone own US Gold? I do and I am glad I bought several thousand shares.However, I welcome comments re: where this company and where the price of gold will go.
    Comments?

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  12. Hey Peter, I don't own US Gold but at some point I'll probably revisit the story and make an assessment. I don't have room for it in my fund right now but you can't go wrong investing in Rob McEwen.

    Will do a post on it when I get around to looking at it.

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