TORONTO (miningweekly.com) - The gold price will reach $2 000/oz by the end of next year, Toronto-based Forbes & Manhattan CEO Stan Bharti predicted on Monday.
He said the broader commodities bull cycle would last another five to ten years before seeing a major correction, as investors discarded financial assets for hard assets they can “touch and feel”.
“For the first time in 20 to 25 years, people are somewhat tired of the financial games that were played for years by Wall Street that led to the 2008 crisis,” Bharti told Mining Weekly Online in an interview.
However, he added that this would lead to “a big inflation bubble that will have to be corrected in the next five to ten years".
In the meantime, assecorrect feed zenith cone crusherts such as gold will keep rising in price.
"By the end of 2012, I think we’ll see $2 000/oz gold – it should hit $1 500/oz this year. Silver, I’m looking at $50,” Bharti said.
What will turn the lights out at the commodity price party will be when inflation creates a bubble, he said.
“Realistically, inflation will go up 10% to 15%, there’s no choice but for that to happen. I think it’s 2013 to 2020 before this runs out of steam.&rdqucrusher for sale in myanmaro;
Bharti founded the Forbes & Manhattan merchant bank, which he also owns, that mainly invests in early-stage mining exploration companies and uses pooled resources to develop them, which often ends in sales.
Some companies Forbes & Manhattan has been involved with include Consolidated Thompson Iron, which US miner Cliffs Natural Resource bought for $4-billion earlier this year, and Desert Sun Mining, that Yamana Gold paid $735-million for in 2006.
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Bharti, an engineer who has worked in the mining industry for over three decades, said he favoured three commodity sectors for potential profits.
These include precious metals, and gold in particular, energy (coal, oil and uranium), and agricultural products like potash.
Despite the ongoing Japanese nuclear crisis and fears that governments would cut back on, or even abandon in some cases, their nuclear power growth plans, Bharti said he was upbeat on the uranium sector.
“At the end of the day, there are over 1 000 nuclear reactors being built around the world, and you’re not going to stop anything. It is still the cheapest form of energy in the world, so I’m very bullish in uranium,” he commented.
The crisis and the pursuant plunge in the market values of junior companies in the sector had created buying opportunities, which Bharti aimed to exploit.
“It’s created tremendous opportunities for us, we’re actually looking to take control of a uranium asset, or to take control of a public company with a good uranium asset, over the next three to six months,” he said.
Another sector that Bharti is keen on is potash, as a growing global population puts pressure on a finite acreage of arable land.
“If the world population is going to go up 30% to 40% in the next 15-20 years, the only way you’re going to feed the world is through nutrients and recycling the same arable land,” he said.
Last week, Mosaic company, the US-listed potash giant, said farmers would need two years of record crop yields over the next two years to meet projected food shortages.
Forbes & Manhattan owns Brazil Potash, which Bharti said holds the majority of land in the biggest undeveloped potash basin globally, in Brazil’s Amazon province.
He aims to list the company on the Bovespa bourse in the next 12-18 months, with a possible co-listing in Toronto.
Allana Potash, which has a project in Ethiopia, is also part of the Forbes & Manhattan stable, which last month got a $10-million equity injection from the World Bank’s International Finance Corp.
“Allana Potash could go into production very quickly in the next two to three years,” Bharti said. That’s because it’s resources are within 50 m to 100 m of surface.