TD: The project is highly developed. The highway from Reno goes very close to Midway’s property. It has power; there have been four or five years of drilling on the site. Reserves are building nicely.
TGR: What is up with Coeur Mining’s operation in Nevada? It does a fair amount of silver production along with gold production.
TD: Coeur Mining is redeveloping the Rochester silver-gold mine in an area of Nevada that has been mined for close to 100 years. Coeur is bringing in more modern, efficient tools for drilling. This is a story well worth looking at as it proceeds. The Street has an eye on it because Coeur is beating its own projections.
TGR: Are precious metal prices bound to go up, or are they going to stay flat for a while?
TD: Gold is highly responsive to geopolitics, but I see the price as turning from a bottoming process. Selective, smart gold investors look for more than one product line, a combination of gold and silver and royalties. Patient investors will be well rewarded for waiting out this period of a strong U.S. dollar. But for a quick buck, gold mining is not for the faint of heart.
TGR: As an energy and gold investor, you have been through many short-term market fluctuations. How do you ensure that your portfolio is positioned for long-term success?
TD: A smart approach is, as always, a portfolio with lots of variety. Don’t get carried away by believing in ten-baggers. Assume that your best investments will double in seven years. Spread the money around. Not just in mining, but in energy, infrastructure and so forth. I come out of the big utility electricity world. The successful big electrical utilities are those that have coal plants, hydroelectric plants, natural gas plants, nuclear plants. Successful utilities are investing cash in renewable energies, be it solar, wind or geothermal. Look what has happened to coal, as impacted by the Environmental Protection Agency in the U.S. The coal generating side of the electricity business is in decline. A utility that had bet the house on coal would be out of business now. A solid, sustainable business, be it energy or mining or any type of endeavor, spreads its risk.
TGR: Thank you for being with us today, Thomas.
Thomas Drolet is the principal of Drolet & Associates Energy Services Inc. He has had a 44-year career in many phases of energy—nuclear, coal, natural gas, geothermal and distributed generation, with expertise in commercial aspects, research and development, engineering, operations and consulting. He earned a bachelor’s degree in chemical engineering from Royal Military College of Canada, a Master of Science degree in nuclear technology/chemical engineering and a DIC from Imperial College, University of London, England. He spent 26 years with North America’s largest nuclear utility, Ontario Hydro, in various nuclear engineering, research and operations functions.
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