RE: Shorts RIP.......let's now roll16 Sep 2020 08:52
Headancer agreed, below post from twitter:
Should the Dow Jones rare precious metals ratio retrace to 1:1, which it has on several occasions in the past, the price could climb to $15,000 to $20,000 an ounce assuming the precious metal catches up to the Dow.
Due to the expansion of precious metal prices this year, coupled with falling energy prices, margins in the industry have never been better.
As the precious metal price goes up, that difference [in PM price and energy prices] will go right into the margins and you are seeing margin expansion. The miners have never had it so good. The margins they are producing are the fattest, the best, the absolute unbelievable margins they’ve ever had.
Margin expansions and the stock price rally that the mining sector has seen this year should 'NOT' dissuade new investors from entering the space.
You haven’t missed the boat at all, even though the stocks are up double from the bottom. At the bottom, six months to a year ago, the stocks were so cheap that nobody was interested. It’s the same old story in our space. At the bottom of the market, there’s never enough money, and at the top, there’s always way too much, and we’re barely off the bottom at this point in time, and there’s a lot to go before we reach the top.
More exploration activity is expected from junior miners, Lassonde said.
I would say that by next summer, I would not be surprised if we were to see exploration budgets up by anywhere from 25% to 30% and the year after, I think the budgets will be up more likely by 50% to 75%. I do believe there’s going to be a big increase in exploration budgets over the next two years.
Importantly, senior miners are likely to spend more on acquisitions.
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