Gold has experienced the smallest supply growth of all the major metals over the last 15-20 years, by a significant amount. At the same time, there have emerged major new customers in China, India and the Middle East. Gold tends to do well in environments of low to negative real rates, and it is very hard to see the political will for sustained and multiple rate rises. I don’t see any adjustment to a positive gold thematic in the near-term. As for exposures, Lion backs developers to leverage valuation uplift as projects are de-risked, and this is usually with respect to a project meeting our quality expectations rather than fulfilling a desire for commodity exposure. We also like a handful of pre-production situations for their growth potential, a good example of which is EganStreet Resources, which has very high-grade gold asset in WA, and is expected to list on the ASX in mid-September.
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