“But if everything is a domino effect, what are the next dominoes to fall?”Ĭosta believes that one of the important changes will be to multiples in equity markets, which will need to be adjusted downward. I think that's a major opportunity to be allocating capital towards the miners.”Ĭosta said this new reality is causing a domino effect which is now playing out across the market. “What we tend to see during inflationary decades is that investors tend to focus more on tangible assets. “This shift towards focus in profitability is a real shift,” he said. He also sees the broader economy beginning to adapt to the new realities of high inflation and low growth, and he believes this will drive new investment in the mining sector. “What is paying off is to be aggressive, invest in the future, and to put money to work into what their businesses are supposed to be doing.” “And what is interesting is that if you backtest, the ones that are performing better are the ones that are actually doing more CapEx, the ones that are actually increasing production, not the ones that are giving back money to shareholders through dividends and buybacks.” “Energy companies are printing money,” he said. “At least a triple in gold prices would be likely what's going to happen.”Ĭosta sat down with Kitco News reporter Ernest Hoffman at PDAC 2023 in Toronto last week, where he shared Crescat’s latest analysis of the gold market.Ĭosta said cash-rich miners should follow the example of the most successful energy companies by putting money back in the ground. “I like to be conservative, even though I'm very optimistic, but it's clear to me that if you look at other times, we've had very strong performances in an environment like this,” Costa said. ![]() Gold could easily triple in price in the current economic environment, and gold miners should see a big move upward as well, according to Tavi Costa, Portfolio Manager and Partner at Crescat Capital.
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