VR: Another company we have been following for some time is Paramount Gold and Silver Corp. (TSX:PZG; NYSE.A:PZG). This high-profile company has multimillion-ounce, advanced-staged projects in Nevada and northern Mexico and already has more than 4 Moz. in NI 43-101 resources.
TGR: Are those inferred resources?
VR: Its resources are in both inferred and M&I category. Paramount is not under full coverage but we've been watching this company and know a fair bit about it. It's exploring in an area populated by established gold companies like Goldcorp, Alamos Gold Inc. (TSX:AGI) and Gammon Gold Inc. (TSX:GAM; NYSE:GRS). We think Paramount has the potential to become the next big thing, in terms of an advanced-stage gold explorer. It already has a $500M market cap, and we think it'll likely go to the next stage of becoming one of those high-profile companies like Lake Shore Gold, for example. The management team is very strong and has been doing a great job of understanding the geology. Paramount's immediate neighbor is Coeur d'Alene Mines Corp. (TSX:CDM; NYSE:CDE).
TGR: Coeur d'Alene is a silver miner, so if it's next door there must be silver in the deposit.
VR: There is silver in the deposit but Paramount's project is more a gold-silver than silver-gold property in terms of potential. But if you look at current silver prices, it's becoming a very attractive play in itself.
TGR: Generally, when you find a gold-silver deposit it contains significantly more silver than gold.
VR: That's correct, in terms of volume. The known resources for Paramount are 4.5 Moz. gold and 12 Moz. silver.
TGR: And the model price for Paramount?
VR: Actually, we don't have a model price for Paramount because it's not under full coverage. But, as I said, we are watching this company closely. It's part of our gold index.
TGR: What should our readers expect to happen with the gold price over the next 6–10 months?
VR: Gold is in a sweet spot right now—it's a hedge against risk, a refuge for people who are worried about risk. Then, down the road, you have inflation. I wouldn't be surprised if gold keeps growing by 10%–15% on a yearly basis for the next few years as it has for the last five or so. We started this year at $1,350/oz. and the gold price could very well go to $1,500/oz.–$1,550/oz. by year-end. Then, it could be looking to build on those gains. Don't be surprised if you see gold around $1,800/oz. in a few years.
TGR: Thank you for talking with us today, Vikas.
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