Andrew Pullar, CEO of The Sentient Group, a private equity fund, says his plan for investment success is all about identifying companies with long-life, low-cost, world-class assets and supporting them through to production. In this interview with The Gold Report, Pullar plots the course for a handful of what he believes are world-class mining assets.
The Gold Report: Please sum up your current view of the gold equities market as gold hovers above $1,100/ounce.
Andrew Pullar: To come to terms with what has happened in the gold equities market, you have to understand what has happened to gold itself. The overwhelming contributor to a softer market is really a stronger U.S. dollar environment because that’s not good for gold; the threat of higher rates in the U.S. will probably keep gold subdued for some time. The U.S. Federal Reserve indicates that even an uncertain global outlook won’t delay a rate hike for much longer, so we see gold as a real asset that is behaving like a currency that pays zero interest. The big positive for gold is that you can’t print it, so the price over the long term should correlate well to the increase in money supply. In other words, it should go higher.
TGR: Could raising interest rates hold any positives for gold?
AP: Raising rates may have one benefit for gold in that it could cause unexpected market turmoil, which is risky for investors. And investors don’t like risk. But gold equities are hurting in anticipation of a softer gold market. Gold producers have had a couple of years to focus on cost cutting. The prospect of further low gold prices is keeping discretionary investors sidelined.
“Cancana Resources Corp.’s manganese project has some of the highest grades anywhere in the world.”
We’re also seeing that …read more