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How Gold Mines Influence the Price of Gold a relationship you need understand in finance

Table of Contents

Introduction ................................................................................ 3

History ......................................................................................... 4

How exactly is Gold sourced? ................................................... 5

How is Gold sold once at market? ............................................ 6

Where is Gold sourced from? ................................................... 7

Why Gold exactly? ................................................................... 10

What Gold means for you and your portfolio ...................... 12

What Gold is offering and why you can’t let it go ................ 14

©2015 Capital Gold Group, Inc. All rights reserved. Capital Gold Group, Inc. is not a licensed securities dealer and is in the business of selling precious metals, not securities, options, futures, etc. The purchase and sale of precious metals does involve risk. The values of pre-cious metals are determined by the economic market, and their prices fluctuate daily. The factors involved in the value of a precious metal at any particular point in time include, but are not limited to, the following factors: scarcity or perceived scarcity, current demand, value of the dollar, market sentiment, political events, economic reports, government action or inaction, popular culture, etc. Capital Gold Group, Inc. would be the first to say that this kind of investment is not for everyone. On the other hand, one can be a collector of precious metals without concern for investment outcome. As precious metals can decline and increase in value, it is suggested you conduct your own research or study of precious metals before making a purchase, and that you be prepared to hold your precious metals for the long term if you are using them as an investment vehicle. Capital Gold Group, Inc. is here to provide you with excellent customer service and value. If you have any comments or questions about our disclosures, please feel free to call us toll free at 1 (800) 510-9594.

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Introduction

When it comes to investing many people have two answers: their accountant and the Wall Street Journal. These tried and true foundations have seen a good number of investors achieve some solid results. ‘A good number’ and ‘solid results’. These words are serviceable, functional — and odds are good familiar to you — but do you what they are to us at Capital Gold Group? Insufficient. Insufficient to our operations and aspirations for our investors. We at CGC indeed subscribe to tried-and-true adages; a diversity of assets is best, do your homework and invest cautiously if new to the world of wealth creation. Therefore, we can indeed commend and recommend a regular visit to your account and daily read of the Journal as sage financial moves. This said, it cannot go un-stated we also believe in a deeper level of engagement and education will almost always deliver a greater return on your investments and for your personal finances.

We’ll leave the decisions to you, always. But we’ll also seek to ensure you’ve every informational advan-tage and piece of analysis available so that you can make not only the most prudent decision; but the wisest one. This means putting be-fore you easy-to-understand guides to world markets, events and occur-rences that other financial planners may not feel need to tell you (or indeed they may not want you to know). We at CGG operate differ-ently, we believe our clients are best

when best informed, and take seriously our duty to inform you duly. Herein lies the purpose of the following eBook.

To help you understand and acquire a good awareness of the in-depth detail of Gold Mines. This shall give you a grounding upon which you can look across the markets and wider world and look to discern ideal avenues for investment. This shall ensure you’ll have the tools to mine your own opportunities for prudent financial deci-sions. This will mean you are not only well served in the business of building financial wealth; but conserving the gains you have already worked so hard to acquire. In a world where the global economy and relative certainty have never sat so far apart; such an endeavor to safeguard your finances can never be anything less than wise.

So, may the following detail for you the history, the details and the core information you need to understand gold mines. May it educate you, inform you and then seek to secure you and your own finances, safe in the knowledge you’ve looked to build a cautious financial foundation; while also remaining able to identify real and robust ave-nues for growth when they so present themselves.

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http://www.capitalgoldgroup.com/


History

There was nowhere they would not come from to get to California. The United States, already a land of so much promise and opportunity for generations of immigrants in decades prior — so much so the French People felt it proper to gift a certain statue that today sits in New York Harbor — saw in the mid-1800’s a new diaspora cre-ated out of the blue; and all as a result by what came out of the ground in the sun soaked Western state. What California meant to ‘citizens of the world’ was opportunity henceforth unforetold; and even today still rarely spoken of. It was the chance to strike out and make a new beginning (and where better in a nation that had so well made its own new beginning) and bring with it the promise of a new life of wealth and opportunity. We have told you prior why Gold is Great — and this has always been true — but perhaps it can best be said in the days of the California Gold Rush; Gold was sought to grow.

January 24, 1948. The day it all began, the day that California — a state when viewed independent from the rest of the US would still be the world’s 8th largest economy — etched into its history its reputation as the Golden State. It all started with a distraction. James W. Marshall, a man who may otherwise have happily lived out his life in the quiet Western world of California pre-Gold Rush kicked it all off when he discovered a golden nugget in a Sacramento riverbed. His employer — agriculturalist John Sutter — may not have been so delighted to know Marshall had his eye off the job and instead on a precious rock; but history doesn’t judge Marshall unkindly and Sutter would surely not begrudge a man for beginning one of the great migrations of people from four corners of the globe ever seen up to that point; and ever seen since.

The legacy of this opportunity created here still can be seen all across the state today. Head on down to the Golden Gate Bridge and drive on across from San Francisco’s Chinatown — where so many who first came here en route to the goldfields or left it newly wealthy ventured through — to Oakland; a city with the current NBA World Champion holders; the Golden State Warriors. You may well think that’s a nifty name for a team looking to homage the history of the state it is in; but then the San Francisco 49ers would surely feel left out. When the new team in San Francisco was founded in 1946, World War 2 has ended and an entire generation of Americans looked out West with the new promise of life along the sunny shores of the Pacific Ocean. Yet, though the 49ers looked toward a boundless future; it was within their past they found their inspiration; taking their name from the folks who so boldly charged forward and into the field of gold mining where it all began 100 years ago in the California mines and quarries.

Not just here did gold touch the lives and the wider economies of formerly quiet and august states. Just a decade later, the city of Melbourne, Australia experienced a boom across their city and wider state of Victoria as a result of the gold rush. From 1851 to 1860, this took a city that was at the time a remote outpost of the British Empire in the Southern Hemisphere and generated such a change to Australian life as to at one point see this city for-merly more akin to a village have the highest standard of living in the known world for a period of time. Along-side the impact on the wealth and prosperity of the Australians in the young nation rapidly growing, the gold rush also saw a new wave of immigration and delivered an array of capital works and a new civic pride to the city of Melbourne; and wider nation of Australia. Indeed, alongside its legacy still being visible today it is very much a reality — just as it did in California — that gold contributed to no small degree to shaping and forming the identity of another city of the ‘New world’ and turning it into an economic powerhouse.


How exactly is Gold sourced?

There are in the main, four types of gold mining. They are, hard rock mining, byproduct mining, placer mining and the processing of Gold Ore. The following chapter shall take you through each of these in an easy-to-understand but detailed way; so you’ve both a clear understanding and solid foundation upon which to consider and pursue your investment future in precious metals.

Hard rock mining

To the minds of many ‘hard rock’ will be something most identified with a particular genre in iTunes or Spotify. When it comes to gold however, it is indeed — for though not a direct match with AC/DC’s heavy chords — it is instead the process mining that is amongst the less involved and arduous. By seeking to mine over a surface where great excavation has already occurred prior — whether by natural erosion over thousands of years or as a result of man-made digging — open pit mining is the most widely used avenue for mining in the world.

Byproduct mining

Byproduct mining is as the name suggests, an avenue of mining whereby the gold in secondary towards the chief aim of the operates that occur at a particular mining site. While the gold or other form of precious metal that is sourced there shall still be of value — and pursued accordingly — it is nonetheless considered a secondary aim of on-site operations. Whether sand, gravel or other materials, typically this means the quality of the precious metals sourced via a byproduct mine is not as refined or valuable as the sort that can be sourced elsewhere.

Placer mining

When it comes to the history of gold mining, Placer mining is the manner in which most people associate prospecting and individuals mining for gold. Often the domain of vagabonds who wandered to goldfields to seek out their fortune, today the use of a pan and sifter may’ve been confined to personal endeavors; whereas the commercial use of the placer method found some success when it came to underground operations where the gold and stone surrounding it were frozen or too cold to drill. Ultimately, both in the 19th century and in today’s contemporary use, placer mining successor can be identified in hydraulic mining (the use of heavy jet streams of water to undertake soft excavation and free from its holding gold and other precious metals embedded in the surface).

Processing Gold Ore

The process of Gold Ore is a method often used by large-scale operations for the effective (if expensive) sorting of gold with a straightforward and streamlined approach. Normally, this begins with a large-scale excavation of rock and other sediment at a mine before moving the quantity of material collected off-site for processing. Just like the old assembly line for a car or kitchen sink, the material is delivered and then travels along a conveyer belt through various steps whereby it is separated, disseminated and then purified before the gold concentrate con-tained is finally totally distinct from all other material and is then collected as the end product.



How is Gold sold once at market?

However gold is sourced the end of the line shall always be one and the same: to bring it to market. Accordingly, a wide variety of options exist for an investor when seeking to bring the ownership of gold (and other precious metals) into their portfolio. One such option is via direct investment in a mining company publically listed on the stock exchange. As their mining operations proceed the prospect of you sharing in their profits via dividends (or rise in share price value for resale to market) is one such avenue for growing your share of gold ownership.

Then, there is the option of Exchange Traded Funds (ETF). An ETF index that shall hold investment in a number of gold companies shall in turn stand an investor in good stead to reap the rewards of an industry-wide rise in price and value of gold. For those looking for a conservative and secure buy an ETF often represents an excellent purchase and hold for the long haul. Yet, as discussed in the following chapters, while individual gold mines and the wider gold industry may have a sterling promise for profit in the months and years ahead; market volatility is a real challenge to navigate in the turbulent currents of the 2015 global economy.

So, what method for gold acquisition and ownership stands distinct from this? Direct purchase.

By buying and having direct ownership of gold you take into your hands the value and the long term prospects for profit of the precious metal independent of an individual mine or companies failure to grow or expand as well market upheaval in the short to mid-term that can diminish the value of a holding in an ETF.

Direct ownership in gold also opens to you a diverse variety of investment options. Whether acquisition of gold bars or coins (alongside particular jewelry and other crafts that shall hold a consistent value) there are a number of different mints and historically significant collections that offer the prospect for not just a diversity of invest-ments across your wider portfolio — something we at Capital Gold Group have always advocated as sage and wise — but a truly strong and steady set of holdings in your gold and precious metals portfolio.



Where is Gold sourced from?

Grasberg

When it comes to gold mining, one need look South of the Equator is amongst the most important in the world. The biggest mine by both size and output, it has been subject to a rather remarkable history – having thought to have been exhausted in the early 1980’s before the Indonesian government made the decision to explore the area further at decade’s end. Today, the mine is home to the world's largest gold reserve – and while various sources dispute the exact placing – it is also is amongst the top three largest copper reserves.

Today, Grasberg is currently owned by a mix of privately owned entities with the Government of Indonesia retaining an approximately 10% controlling interest in the mine. While the mine remains a prodigious supplier of metals to the world market, it is also true Indonesian governance has at times been characterized by flirtation with nationalism alongside authoritarian rule. The current President Jokowi’s efforts to combat wide-scale cor-ruption – alongside the ongoing stability of the mine generally over recent decades – suggests this is a mine with a relative security surrounding investments within it.

Cortez

The second biggest mine in the world by size in Cortez, located in Nevada, USA. True, many may think first of Las Vegas when they hear the name Nevada; but Cor-tez is a veritable oasis of precious metals; many of which end up in some way or another occupying the casino tables and ‘streets paved with gold ‘of Las Vegas. First opened in 1862, and in its current operation since 1968, the mine continues to function today primarily as an open-pit mine with a number of sites of hand (though it has also in recent years expanded to underground mining techniques as well). Compared to Grasberg, Cortez has enjoyed a more steady and consistent operation history, with recent years seeing Rio Tinto selling its 40% share of the site to Barrick Gold Corporation. This is a mine that represents a strong and consistent long-term investment and is a worthwhile starting point for those seeking to invest direct in gold mining.

photo: Alfindra Primaldhi

photo: Barrick Gold



Goldstrike

Another solid investment option comes with Goldstrike, also located in Nevada, USA. With solid results having been achieved in its 2014 oper-ations — having produced 902,000 ounces of gold and at $854 an ounce (all costs inclusive) — the forecast for the mines future remains one with strong growth prospects long-term. What’s more, having been in oper-ation since 1976 it is one of the newer large-scales mines in operation across the world; making it free of the complicated governance and own-ership history (read: ‘red tape’) that can often be debilitating to a mines ongoing operations; as well as its profit-margin. Were there a drawback from investment in Goldstrike it comes with it sharing with Barrick Gold Corporation being the owner of this site and investor in Cortez. Given Barrick is currently the largest gold mining company in the world little con-cern need be held for its long term prospects; but those committed to a strong diversification strategy across their investments may find the prospect of investing in just one of these mines the most appealing option due to managerial and administration challenges that could arise within Barrick at the two sites.

Yanacocha

Go ‘South of the Border’ and you’ll find Yanacocha is held to be the largest gold mine in Latin America. Located in Peru and covering 525 square miles. In operation since 1993, today Yanacocha. Like Gras-berg and Cortez before it, Yanaco-cha is a mine built upon open-pit mining.

It is true the mine has been subject to a significant degree or protest and resistance to expansion in recent years. While this should not be seen as all-encapsulating of the wider and overall future prospects of the mine, it does indeed mean in the short-term investors need be considered when appraising where best their money may be placed. With an annual production to the tune of $7 billion a year however, Yanacocha is a mine at once considered a solid investment long-term; and surely a manageable risk in the interim.

photo: Wikipedia

photo: Euyasik



Muruntau

The Muruntau gold mine is located in Uzbekistan and is the largest mine in Central Asia. Set in the Kyzyl Kum Desert the mine was first discovered as a source in gold in 1958 — during the height of the Cold War — that very much informed its operations in the former USSR for the forthcoming decades. With the 1990’s brought a formal independence of Uzbekistan and in turn the opening up of the mine’s operations to private investment. The mine held to contain up to 180 million ounces of gold today operates underneath the banner of Oxus Gold in a joint venture with the Uzbekistan government. While the political climate in Uzbekistan is stable overall, disputes have arisen surrounding the mine and operations between Oxus and the Uzbekistan government. In turn, it is true recent political and economic instability in the region by Russia and China have changed the tone surrounding the long-term prospects for economic development in the Eurasian region. A mine to be invested in either with caution or view towards a long-term hold.

photo: Alexander Raykov



Why Gold exactly?

We exist now in an era where the post-GFC world has turned the old certainties on their head. ‘Safe as houses’ — look across dozens of US states and countless American cities to know that is no longer true. Indeed, cities like Detroit that were once the very bedrock and heartland of the American Dream were dealt a near-fatal blow by the GFC. The Motor City and others like it shall indeed rise again, and anyone who writes off the United States future has never lingered long in history and acclaim; but it is undoubted in the short term and immediate years ahead finding safe haven in the property sector is indeed an uncertain and risky undertaking.

Then there is the idea of stocks. ‘Blue chip’ stocks in banks, manufacturing and industry that were once the bed-rock of growing and maturing your portfolio still feel today the aftershocks of the GFC. What’s more, while a cen-tury ago the United States may have enjoyed a supreme and ever-rising economic power coupled with a relative isolation from the economic threats to European industry such as war and revolution; today the international economy and global exchange is undergoing an economic revolution.

Gone are the days where an American company can sail free-ly through the trouble that arises from a farmers strike in China or a bank’s collapse in Greece. While in the good times the international economy does indeed offer ca-pacity and opportunity for profits like never before; when it's bad it is bad. And right now, with the ongoing uncertainty surrounding Greece’s membership within the European Union — and indeed the very future of the EU as a whole — means the ‘Old world’ shall indeed be dealing with demons of its past deals for years to come.

Then, there is China in the ‘New world’ — and the forecast is not much better. Recent years have seen the Chi-nese government engage in occasional brinkmanship and territorial stakes both on the world stage and in the economic sphere. For a long time supporters of China’s ‘Peaceful Rise’ doctrine declared this is just the old game being played by a new player; and that once China has finished rising it’d behave like a ‘normal’ and ‘responsible nation internationally. The events of August 2015 affirmed in the financial sphere this is just not the case.

A currency devaluation on August 11, a share market crash of 8.5% on Monday August 25 — already now enter-ing the lexicon as ‘China’s Black Monday’ and a government is Beijing disinterested in international economic conventions rather than its own domestic politicking. Whispers of another financial tremor have once again



began to grow following these events, and across the share market investors are nervously selling off long-held stock for fear of a new GFC approaching. Further, those who would say such events is China do indeed remain too far and remote to affect American business need only look at the opening of the Dow Jones that same day hours later; with the market falling over 1,000 points at open in the wake of the news out of Asia.

Cynics will point to this volatility and suggest it means wise and prudent investing is altogether impossible and keeping your money secure is a foolish task — all the while storing their money under a mattress in their garage that doesn't quite lock properly. We can offer you a different way and do so with clear cut evidence.

Property is unsafe, stocks uncertain; and the dependability of the Chinese economy to continue to be Asia’s eco-nomic ‘engine room’ is looking shakier by the day. There has perhaps never been a worse time in recent to invest in certain avenues for wealth creation. By contrast, in the current economic climate; there has never been a better time to buy gold. Let us tell you why.

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What Gold means for you and your portfolio

Just like all others, the world of precious metals is subject to volatility and the ‘unseen hand’ of the market. This means the industry shall have their tried and true long-term successes; as well as those startups — that though true some shall achieve a brilliant and sustained success — many shall fail; and take their profits with them. Many in the precious metals industry seek to sweep this reality under the rug, they wish to conceal and be less than upfront: we at Capital Gold Group take a different approach.

It is no secret we believe in gold, it is not news we can deliver a long term plan to you for wealth cre-ation and income generation that can offer you a strong and sus-tained path for growth. Yet, we are also upfront and straightforward: investing with ease is almost never possible; and especially within this economic climate. This should not deter you when it comes to gold however.

Just like any other industry there is indeed supply and demand. There is rising profits, and falling inter-est — in the short term; but not the

long term. When the GFC occurred the United States saw prestige bank after prestige bank teeter on the brick and flirt with collapse. Even today this has seen the market maintain an uncertain state where if one bank ‘sneez-es, the rest catch a cold’. By contrast, the dynamic is completely different with gold. Gold is tangible, certain, and secure — its very material is embedded in the ground and in perpetual demand once it is mined.

New miners may begin their operations with hopes of hitting it big just as those adventurers and dreamers did when they first traveled out to California or Melbourne all those years ago. Should they ‘hit it big’ and literally strike gold; the profits shall flow on for investors and the prospects for a wider rise in gold price becomes very real. On the other hand, should they fail to do so; the international gold economy has a ‘fail safe’ built in; with the closure of one operation the demand and relative scarcity of gold being mined by others will increase in price. What this means in practice is gold can only ever be set to grow, gold has a stable foundation and a ‘never look back’ narrative as an investment commodity. In sum, even when gold’s going bad — it's still going great.

This is an important reality all investors need understand. And, lest this be seen as the positive promotion of a shaky foundation we can offer you some real and solid evidence — indeed the greatest evidence — upon which you can base your investment decision once you’ve heard what we’ve to say here: history. Let’s go ahead now and compare the history of Gold — which has been doing pretty well for the last 5000 years or so — with tulips.




You visit a florist right now and try to buy a dozen tulips. You’re looking at around $24.95 USD. Or, hop onto eBay, and you can pick yourself up some bulbs to plant for under $10. This is not bad value you say? We agree. Which is why you’ll understand when we say Gold has always been good value historically. Was in Ancient Egypt, was in Ancient Rome — Italian Palaces of the Renaissance, the UK Houses of Parliament, the hallways of the American and French Senate's built after their revolutions — gold has always been valued and regarded as such.

Once, so was tulips; to the tune of $1,250 USD. That’s right, $1,250 USD. That’s not for an orchard — or even a whole aisle of bulbs from your local home depot — that was just for one tulip flower at the height of what became known as Tulip mania. Considered the first modern occurrence of an econom-ic bubble, the boom then bust of demand for the recently introduced flower throughout the Netherlands saw over a period a bust in 1637 just before the period known as the Dutch Golden Age came to an end. It is indeed true there is limited data in existence sur-rounding the exact nature of this occurrence — it is also therefore a phenomenon that remains contest as to its wider impact in scale and scope — but is undoubted a core message can be taken away from this era: gold endures.

The essential lesson to take away from this event in the history in Holland is thus: ignore the fashionable, the daily, and the incidental without context or clarity; and look for the long and consistent trends. To be sure, a prudent and sage investor is both a consistent surveyor of daily events — and one who doesn't hesitate to move when a solid opportunity arises.

Yet, just like a captain who hears rumors of a safe harbor ahead it is worthwhile to consider why you wish to move before you do. If you are enticed by an opportunity then by all means sail into port; but you should not be drawn there by fear or peril or stormy seas. Certainly, the world of investment requires some courage and fortitude sometimes, but if you’ve build up a solid and robust plan you should not hesitate to stay true to it and commit to it for the long term. The same is true of gold. Flower booms may come and go, but gold stays forever.



What Gold is offering and why you can’t let it go

You have read of gold’s history in the modern era. You’ve read about a number of mines and their operations across the world. You have had us place before you the very real economic cracks and political fractures that exist across continents and the wider world economies. You understand it is a time of great challenge, uncertainty and risk in the world markets; and you’ve received a straightforward and direct line from Capital Gold Group as to why gold represents a strong, robust and resolute investment option for you within the stormy seas of 2015’s global economy.

What does this mean in practice? What it means is buy gold with a view to the long term. We at Capital Gold Group pride ourselves on being upfront and direct with our investors and wider audience. Save for buying on a particularly lucky run, few shall buy gold one day and sell it off at a giant profit the next.

It is also true a great many do buy — and buy well — only to then sell; and sell high. Buying gold brings the promise of a great return in future with little risk of long term value ever being lost. Buying gold means purchas-ing a part of a narrative that has been seen across human history and countless societies. It is the sort of narrative that is timeless, continuous, and consistent; a narrative you need be a part of.

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