gold bars Article

The traditional mining economic model is no more favorable elsewhere in the world than it is in North America. It's just a matter of where the mining company experiences its expenses. Gold Mining Mining is a capital-intensive business that operates on small profit margins. To develop a commercial deposit costs hundreds of millions of dollars. It takes at least 5 or 6 years to go from mineral exploration to production. For a major mining company, the odds that a mineral prospect will become a mine are about 1-in-500. Gold mining is a high stakes gamble with a poor Return on Investment. Mining Stocks During a Bull Gold Market, mining stocks make an excellent speculation. However, mining shares make a terrible investment. If you are investing in Junior Resource Companies, your odds of having your company actually develop a mine are one in several thousand. If you are investing in major mining companies, your investment will falter when the Bull Gold Market ends. The rule is speculate, don't invest. The Only Profitable Gold Mining Strategy The only mining strategy that potentially consistently beats the mining economics model is Pocket Mining. The miner's goal is to produce visible in quartz for the jewelry industry or to produce crystalline specimens for museums and mineral collectors. It's economic because there are no mineral exploration costs. There are no milling costs. The waste rock produced is a few tons per day and not a few hundred tons per day. So, the cost of production is very low. The value of the product is a multiple of the current price. Good quality crystalline specimens sell for twenty times the price, including any matrix material in the specimen. That makes an ounce of crystalline is currently worth $12,000. While pocket mining is the only possible way to make real money mining gold, there are some major risks for investors considering funding a pocket mining operation. 1. Finding a pocket is based upon a sound understanding of structural and stratagraphic indicators. Essentially, you are mining blind. Our pocket-mining group has spent the past seven years working a pocket mine on weekends and holidays. We haven't produced an ounce of specimen and have spent several hundred thousand dollars. However, if we find a pocket as large as the last one recovered in this mine, we'd walk away with over $125 million in profits with a $300 price. Thus, pocket mining is a high stakes gamble with a fantastic potential return, if you are a winner. It's hard work being a winner and luck has to be with you. 2. At the end of the 19th Century, there were thousands of experienced pocket miners working small mines in the Motherlode. Today there are a few dozen experienced pocket miners. Finding experienced pocket miners is very difficult and the inexperienced will waste your money. 3. Honesty has lost its place of importance in modern society. If you find the pocket of your dreams and your miners aren't honest, they will steal you blind. Miners call stealing "highgrading." So, it's up to you, if you want to make money pocket mining, to find honest and experienced pocket miners. It won't be easy. Before you let fever overcome your economic common sense, let me review the mining proposal. It costs you nothing, if I can't find something seriously wrong with the investment proposal. Usually, I can find a score of untrue assumptions about the proposed mining project.
William Cate has a BA & MA in geology. He's the author of "Finding California Gold" (1981) While he primarily makes his living as a merchant banker and equity finance consultant, he has 35 years specimen gold mining experience. He can be contacted at: [http://home.earthlink.net/~beowulfinvestments/minefinder/]