Perfect Gold Forum, Perfect Storm for Precious Miners: Citigroup

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Referring to this week's Denver Gold Group forum as "the industry's most closely-watched event," Citigroup analysts John Hill and Graham Wark Thursday highlighted prominent strategies and themes of the presentations made by 70+ precious metals companies

Referring to this week's Denver Gold Group forum as "the industry's most closely-watched event," Citigroup analysts John Hill and Graham Wark Thursday highlighted prominent strategies and themes of the presentations made by 70+ precious metals companies.

Key themes of the conference as defined by Hill and Wark included: Seeking growth and/or leverage to gold; M&A continuing because--unlike copper, nickel and aluminum--"there is a plethora of junior and mid-tier gold targets to feed the industry food chain;" Minority-interest buyouts continue to promote operate simplicity; "Hedging is practically anathema;" Regional differentiation fading amid mounting regulatory pressure and resource nationalism; Social license and sustainability ever-more-critical following a litany of headline-grabbing hangs-ups. "On balance, the industry is taking healthy steps to balance sustainability and new mine development."...

Hill and Wark highlighted that, so far in the second half of this year, gold equities have outperformed gold prices. Most mining companies are now explaining their path to better leverage. "The magic bullet appears to be production growth, with a bonus for projects in the first and second quartile of the cost curve," they said.

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