Gold News

Junior gold miners facing 'Darwinian cull'

Top analyst Michael Gray has predicted today (October 31st) that a number of junior gold miners could soon be wiped out by the ongoing effects of the global financial crisis.

Mr. Gray, of Genuity Capital Markets, explained in an report that he believes a "Darwinian culling" is a real possibility, with 50 to 75 per cent of smaller mining companies going to the wall.

He claimed that juniors will struggle to secure capital for the next 12 to 18 months at the very least as lenders tighten their purse strings as the global economy slides into recession.

In a note written to his clients, the website quotes him as saying: "Companies with little cash, marginal projects and no key investor [with deep pockets] will likely lose any talent they have and will probably end up de-listing or suffering massive dilution via financing at incredibly low prices."

If Mr. Gray's forecast proves to be true, it could spell a real boost for anyone with a gold investment, as global output would be severely impacted from such a large number of mines closing.

Genuity Market Capitals is an independent, privately-held firm which has been operating in the Canadian markets for the past 25 years.

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