Gold market is starting to resemble elephants trying to fit ‘through a really small door’

Gold & Silver

The relatively small size of the gold sector could lead to out-sized investor gains, said Vrify CEO Steve de Jong.

De Jong sat down for a podcast on Friday with mining reporters Neils Christensen, Michael McCrae and Paul Harris.

Before founding Vrify, which produces virtual mine tours, de Jong had a huge success in the mining space at another firm. He headed Integra Gold, which was acquired by Eldorado Gold in 2017 for $590 million. De Jong advanced the Lamaque project towards production.

Gold appears to be gaining interest in the broader investment community with the precious metal hitting fresh, multi-year highs.

“Sometimes we forget how small sector actually is,” said de Jong. “You can take everything that we do and combine us together and we’re almost one Google.”

De Jong said there is nearly a perfect setup to add another thousand dollars to the price of gold. There is a lot of money out there that is “…coming into a very, very small sector.”

“This is what happens when you try to herd elephants through a really small door,” said de Jong.

This week gold miners started publishing their Q2s, so the impact from COVID-19 disruptions could be weighed. Kirkland Lake kept production in Q2 at the same levels as Q1, just about 330,000 ounces. Mines in Australia and Ontario helped, which side-stepped fewer suspensions. Eldorado Gold powered through COVID-19 disruptions. The company announced yesterday that its 2020 preliminary production was 137,782 ounces of gold, a 50% increase over Q2 2019.

Despite mine suspensions in Quebec, operations at Eldorado’s Lamaque were higher in Q2 2020 compared to Q1 2020 due to higher grades and an increase in tonnes mined per day enabled by the recently received Certificate of Authorization from the Quebec Ministry of Environment.

“I think I’ve gotten a dozen emails in the last 24 hours saying ‘why did you sell that thing?’,” said de Jong.

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