“Gold is good for miners, including young people, big profits can be made,” said First Mining Gold Corp. According to CEO Dan Wilton, gold prices have risen over the past two years, which is good for miners despite rising costs. On the other hand, although the price of Bitcoin (BTC) climbed to the heights during this period, it lost more than half of its peak value.
Digital gold performed well over the medium term as BTC tumbled
First Mining Gold is a gold developer focused on gold mining projects in Ontario and Quebec. The company’s Springpole Project is expected to hold 3.8 million ounces of gold. Wilton says that over the medium term, gold is performing well:
We’re entering this inflationary phase, and you’ve actually seen the price of gold, you know, going up $1,300 from where it was in 2019. You know, now gold is at $1,800 and several times $2,000 tested $2,100.
Wilton notes that mining costs are rising, including drilling contractors, material and energy costs. He also points out the demographics in the mining industry:
It’s really hard to attract young people to work in the industry, and it’s getting harder and harder to attract people who want to rotate and work in a remote camp with a two-week leave.
“Even if the price of gold remains at $1,800, there are still opportunities in mining”
Despite rising costs, gold is unlikely to return to 2015 lows of $1,000, Wilton said. He adds that he is not. He says there are still opportunities in mining, even if the gold price remains ‘stable’ at $1,800. Wilton comments:
What many people don’t appreciate right now is that veteran gold producers are trading with record free cash flow returns. They never created such free cash flow at any point in the gold cycle. You’ve seen margins starting to erode over the last few years by cost inflation, but those margins are at record highs.
At the time of writing, according to CoinMarketCap data, Bitcoin (BTC) is trading at $29,431 with a daily loss of 1%, while the leading crypto is 57% away from its all-time high. Spot gold price, on the other hand, is slightly lower at $1,850.
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