As the price of gold rose upward, junior miners chased ounces at all costs. This was a huge mistake, says Eric Coffin, because it resulted in unexciting projects, low margins and a depressed market. New discoveries with high margins are the essence of the junior.
In an environment of rising capital expenses, gold producers big and small are left with little or no free cash flow. Instead of investing in exploration to maintain production, too many companies are cutting costs and high-grading their current resources.