Junior Gold & Silver Miners Fund

Investing in The Mining Giants of Tomorrow

Mining Shares

We invest in gold and silver mining shares for the following reasons:

  • Gold should perform well as a safe haven investment relative to most asset classes, based on unexpected geopolitical, fiscal and economic events;
  • Silver is also considered a safe haven asset similar to gold but also has a developing strong industrial demand. Its superior electrical conductivity makes it an important metal for the fast growing renewable energy sector and electric mobility;
  • The precious metals mining sector has restructured operations is the last few years, writing off marginal, uneconomic projects and focusing on profitability, higher grades and longevity of mine life. With a stronger balance sheet and more economic operations, the recent recovery in gold and silver prices typically results in rapid profitability expansion;
  • Gold and silver mining shares are relatively more attractive than the metal at the present time particularly of those companies that have viable, profitable operations at current prices whilst retaining the operational flexibility to grow production as the metal price rises;
  • There is substantial and growing demand for gold from central banks seeking to secure their reserves with a safe haven asset;
  • With the unprecedented US deficit and ballooning of debt across the developed economies, countries engage in a futile game of competitive devaluation that benefits gold relative to the weakening currency;
  • Inflation is reported to be rising across the world. The effects of the pandemic-related disruption to industry and logistics chains is proving to be inflationary to which central banks will be slow to react, causing real-inflation. Real inflation will encourage gold investments as a hedge and portfolio diversification;
  • For investors who believe that the gold price will continue to rise, the increased operational leverage from gold shares is very attractive. Take, for example, a gold mining company producing at a marginal cost of $1,000/oz. If the gold price is $1,750/oz and it rose by 15% to $2,000/oz, this would increase the mining company’s marginal profit by $250/oz – a rise of 33%.