Notes from European Gold Forum 2014 - Winter

Discussion HERE specifically relating to Teranga Gold but also some general views.
(Paid site discussing more companies' European Gold forum presentations HERE (early/mid May-14 articles)
Investors have become used to looking at outdated PEA / PFS studies with a view that gold prices have come down and development over-spends have proved costs have gone up.
This may be changing, though of course investors must always be wary of feasibility study, and especially PEA, assumptions.
The juniors which advanced most strongly in early 2014 and since pulled back are interesting to maintain on close watch for renewed strength. From Winter -

• Emerging producers with a bent for expansion have been severely marked down.
• the market is now pricing them as if the execution and cost overrun risk is extreme and the prospect for takeovers of these emerging deposits is nil
• There are some very, very compelling execution lift (de-risking) situations
• The gold optionality, or call premium, on these deposits is also virtually nil
• Time and time again during this forum, presenters state that the feasibility studies used were often done several years ago and that costs have since come down.
• Gold Standard Ventures, for example, indicated that drilling costs are down 50-60%
• Typically, mine plans for the companies on which I am focused have been tweaked to be more scalable starting with smaller capex and simpler designs so as to avoid the high profile development hazards
• The common quote is, “We have good flexibility,” and that it’s a “good time to build a scaleable mine” in terms of labor and material.