First Time Gold Investors….Gold Mining, The Basics

  At the Montreal Analyst.com and Canadian Mine Analysis.com, we believe that gold and silver mining stocks will be one the best performing groups of this decade. Since many readers  are not familiar with gold mining and silver mining, we thought that we would give a quick capsule summary of the “nuts and bolts” (better yet the picks and shovels)of mining.

The basic premise naturally is that the property (project) contains gold. A company wants to determine if gold (or silver) reserves are in the ground. This is done primarily by exploration (such as samples) and eventually by drilling. The samples and drill results are sent to a lab for analysis. That will help estimate the  amount of reserves in the ground. It takes time and is expensive-and it’s only the start.

Then the company tries to determine how to approach the further exploration and the cost of production. Will it be a low cost $800 an ounce? Or $1200 which is expensive. Will the gold reserves last for years? Will the property have access to a nearby mill? Perhaps there is a mill in operation nearby. Note that the Construction of a mill is very expensive.

Infrastructure? Are there roads, electricity and water nearby? Are there workers in the area? There are so many parts to the mining puzzle. We have only touched on a few things but we will have more later.