Gold: The Perfect Metal
Golden Era: Growing Potential in Gold Investment Forum Hong Kong
22 June 2009
Owen Hegarty
Chief Executive Officer G-Resources (1051 HK)
Table of Contents
SECTION 1
Gold- The perfect metal: The key characteristics of gold
SECTION 2
Success factors for gold mining: What to look for when investing in gold companies
SECTION 3
Gold companies as an investment
2
Table of Contents
SECTION 1
Gold- The perfect metal: The key characteristics of gold
SECTION 2
Success factors for gold mining: What to look for when investing in gold companies
SECTION 3
Gold companies as an investment
3
Gold - The perfect metal: The key characteristics of gold
► It’s a commodity ► It’s a currency ► It’s a store of value ► It’s a hedge against inflation, financial instability and geopolitical uncertainty
Gold outperforms during period of rising and high inflation
4
Gold is rare, hard to find & getting harder to find
► Over half of global exploration expenditure is on gold ► Yet few large gold discoveries have been made in the past 10 years ► Lack of focus on Asia represents an opportunity Major gold deposits discovered in the Western World between 1950 and 2003
World 4%
World Exploration Spend
Asia
Asia attracts only 4% of global exploration expenditure = great opportunity
Source: BHP Billiton 5
Gold demand steady but forecast to rise with increases in wealth in China and India
6 6
Primary gold supply from the world’s mines is declining and has been for the past six years
► This relates in part to the fact that quality economic gold deposits are few and far between. ► Confirmation of this claim: world gold production has been steadily declining since it peaked in 2001 in spite of a nearly US$600 rise in the gold price. This goes against basic economic theory i.e. rising prices should bring on more production
7 7
Strong Gold Price Outlook
► Strong physical demand outlook... [continues]
Golden Era: Growing Potential in Gold Investment Forum Hong Kong
22 June 2009
Owen Hegarty
Chief Executive Officer G-Resources (1051 HK)
Table of Contents
SECTION 1
Gold- The perfect metal: The key characteristics of gold
SECTION 2
Success factors for gold mining: What to look for when investing in gold companies
SECTION 3
Gold companies as an investment
2
Table of Contents
SECTION 1
Gold- The perfect metal: The key characteristics of gold
SECTION 2
Success factors for gold mining: What to look for when investing in gold companies
SECTION 3
Gold companies as an investment
3
Gold - The perfect metal: The key characteristics of gold
► It’s a commodity ► It’s a currency ► It’s a store of value ► It’s a hedge against inflation, financial instability and geopolitical uncertainty
Gold outperforms during period of rising and high inflation
4
Gold is rare, hard to find & getting harder to find
► Over half of global exploration expenditure is on gold ► Yet few large gold discoveries have been made in the past 10 years ► Lack of focus on Asia represents an opportunity Major gold deposits discovered in the Western World between 1950 and 2003
World 4%
World Exploration Spend
Asia
Asia attracts only 4% of global exploration expenditure = great opportunity
Source: BHP Billiton 5
Gold demand steady but forecast to rise with increases in wealth in China and India
6 6
Primary gold supply from the world’s mines is declining and has been for the past six years
► This relates in part to the fact that quality economic gold deposits are few and far between. ► Confirmation of this claim: world gold production has been steadily declining since it peaked in 2001 in spite of a nearly US$600 rise in the gold price. This goes against basic economic theory i.e. rising prices should bring on more production
7 7
Strong Gold Price Outlook
► Strong physical demand outlook... [continues]
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