good question docjim. Dan, while "this time is different" from any other time/period, possible what we're seeing here is, in a sense, a replay of the '70's decade - high inflation, rising oil prices, metals jumping along with miners, etc.?
DocJim - rising energy costs tend to hurt miners because of the diesel expense for their equipment and generators. Like any other business, rising energy affects the bottom line but with the price of the underlying metals rising at a rapid pace one would think that the increased money generated by rising silver and gold prices would more than offset the rise in energy costs.
A good exercise might be to call the investor relations department of any miners you might hold or be interested in and chat with them a bit about this to see what percentage of their input costs are tied directly to energy needs. If you do, I would be curious to hear.
Thanks Dan, great suggestion. I will let you know what they say, and also thanks for all the great analysis on here and at KWN! I check the site throughout the day.
That's a nice looking chart! Dan or anyone, how might the rising oil prices effect the mining shares?
ReplyDeletegood question docjim. Dan, while "this time is different" from any other time/period, possible what we're seeing here is, in a sense, a replay of the '70's decade - high inflation, rising oil prices, metals jumping along with miners, etc.?
ReplyDeleteDocJim - rising energy costs tend to hurt miners because of the diesel expense for their equipment and generators. Like any other business, rising energy affects the bottom line but with the price of the underlying metals rising at a rapid pace one would think that the increased money generated by rising silver and gold prices would more than offset the rise in energy costs.
ReplyDeleteA good exercise might be to call the investor relations department of any miners you might hold or be interested in and chat with them a bit about this to see what percentage of their input costs are tied directly to energy needs. If you do, I would be curious to hear.
Thanks.
Thanks Dan, great suggestion. I will let you know what they say, and also thanks for all the great analysis on here and at KWN! I check the site throughout the day.
ReplyDelete