Page 24 - Introduction to investing in Gold

The Beginner's Guide to Investing in Gold
Go further back and take a look at the share prices of gold companies such as Homestake Mining in the Great Depression.
If history were to repeat itself, some mining companies could see their share prices increase dramatically (I’m talking 10X, even 20X).
There are several drivers behind this, but I want to focus on two.
Firstly, the major mining producers could decide to acquire smaller mining companies (often referred to as the “juniors”). Some of these have proven reserves/resources, which have taken years to develop. By acquiring them, the majors may view it as less risky because they can avoid spending a lot of capital (easily millions of dollars) trying to make their own discoveries.
Secondly, the juniors (which tend to be explorers rather than producers) rarely have a processing plant in place to crystallise value, which can take years to build. This allows a nearby producer to dangle a very tempting carrot in front of shareholders – offering them a payday now.
Investing in some Juniors is just one of the strategies that I adopt (I like to be well-diversified). This could also work for you but have a think about the level of risk you want to take. Of course, a junior explorer could get lucky and find a great deposit, but the risks associated with achieving this are high, so it makes sense to invest in several different companies to improve your chances of success.
I’d still urge you to be very careful. Ideally, get some expert advice and have a well-defined strategy.
This is a specialist, high-risk market, so you really need to know what you’re doing if you’re thinking about investing. Of course, if you get it right, the results can be spectacular.
I got it right with one of my ideas, and it went up over 65X in value (it’s called Chalice if you want to check it out). I got in around 15 cents, and it went to over $10. Several others are also up at least 4X.
19