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Message: Greg Gibson quoted on ZeroHedge

http://www.zerohedge.com/news/2014-12-24/chinese-gold-diggers-drop-their-shovels-gold-miner-bankruptcies-begin

“San Gold spent half a billion on their assets, and they haven’t had a profitable quarter in six years,” said Greg Gibson, who became CEO in June after a boardroom revolt against the previous management.

The problem, as gold miners (and their long-suffering shareholders know) and as shale companies are about to find out, is that "the sector had overstretched itself during the commodity boom, when the high gold price, and willing investors, saw miners spend heavily on acquisitions and bring new production on line. Some of the sector’s new production was lower grade gold, which is more expensive to mine and became unprofitable as the price of gold fell."

This all happened before the Swiss National Bank imposed its currency controls by way of a EURCHF 1.20 floor on September 6, 2011 as the Eurozone was tearing apart, and which, incidentally, also marked the record high in the gold price. Since then gold has tumbled by a third and many of the smaller miners have gone bankrupt while others have stopped production or exploration as they look to raise cash.

As Gibson said, “The party is over and its time fix things" and now even the big companies, those which have access to Wall Street's ZIRP capital are starting to fold.

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