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Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Cold as Ice

When we look at the "big picture" for resource stocks it always comes down to the 5 minute university curriculum for economics... supply and demand.

Barrick has a US$1.5 billion gold project in Chile that requires the movement of glaciers because the gold lies under the ice. Guess what?

Canadian firm's mining plan draws protests in Chile

I liked Barrick's claim of a "glacier management plan", maybe they can get to work on a global warming plan next. Glaciers expand and contract in response to climate and in spite of Canada's tremendous ice-making expertise, even mighty Barrick would be hard pressed to rebuild a naturally retreating glacier. Companies don't want to have their fingerprints on environmental matters outside of their control.

The low hanging golden apples have been picked and companies like Barrick are forced to pursue projects in difficult environmental and political climates. This is another example of how the supply side of the gold equation is constrained. Bad for Barrick but a long term positive for the gold price.

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