Pierre Lassonde

Pierre Lassonde is one of the living legends of the mining and resource world with over 35 years of experience


He got into the gold market in 1974. The crash that happened when he got in the business seared soome lessons into his memory

$35 ounce jump to $180 ounce, and then fell 50% when ppl were expecting a new floor of $160

Good Gold miners dont have ANY bank debt..stay away if they do because get crushed on the downswing. They give way assets just to survive

Goldcorp GG started as Wheaton River, a small co. with cash when the market tanked and grew into GG

It's better to do a major capitalization all at once up front rather than having to keep coming back to raise money. As the spot price rises many juniors start financing to get in the game and that is a mistake in the end

Raising money throuh share distribution dilutes the price, and that doesnt work in mining either

Central banks are now net buyers of gold for first time since 1981

Recent J. Paulson comments reinforce the fact that gold is not a bubble...no one wants to listen to him? The public is voting with their money by effectively saying "show us that you can profit from this first, then we'll ivest"

Diamoond markets have three major producers, an oligarchy essentially

Unlike the metals biz, miners fabricators retailers and wholesalers...the miner makes the most - fab 1-0%, wholesaler 10-30%, retailer 30%...miner holds rest because the margin they sell a diamond at is 99%

The monthly production of a large miner in Canada fits in a shot glass...diamonds are a work of art by mother nature and very rare

Bathtub analogy: bathtub is full of GDP..there are many drains - one for Greece, one for CDOs, one for CRE, etc...the taps in the tub are the feds and the Federal Reserve filling the tub with liquidity...once the market corrects and the drains get "plugged", the tub will overflow and we'll have inflation...Fed policies are fighting the deflation they see by erring on the side of inflating...they know deflative destruction is do dangerous that they are leaning toward the other side

Discoveries have not been happening in the past ten years. The finds are 1-3M ounces...growth is in the junior sector...Barrick produces 8M oz a year...its making it difficult to keep up with demand

If gold goes back to $700, there would be destruction in the industry

Gold has a long way to go to be a mainstream investment

May - July is the buying season for gold

Bottom is around $950, but no collapse

This mania will dwarf the 70s and 80s mania because the market is much larger....back then it was the US and Europe...now we have China and India in the silver market

The Chinese were not allowed to own gold until very recently

They have a huge affinity for gambling and they want to own gold

Secular bull could go on for 10-20 years

Invest in mining comapnies with good people... a good asset with lousy manager is nowhere...a so-so asset with a great mgr will always win out