While gold output is in decline owing to falling grades, mine closures and new construction projects being deferred – with the situation compounded by gutted exploration budgets and capital markets being effectively closed for the gold industry – the next big price move could only be up, McEwen Mining chief owner, chairperson and CEO Rob McEwen tells Mining Weekly.

“Gold is cheap and gold shares are very cheap. I think we are at the bottom for gold. More consolidation and rationalisation is to come and today’s biggest producers will be surpassed by new leaders emerging from the midtier.

“These new leaders will have stronger balance sheets, good growth stories and management – more focused on building their shareowners’ wealth first, rather than their personal wealth – will emerge and take the lead,” states McEwen, who is also the founder and former chief executive of the world’s largest gold miner by market capitalisation, Goldcorp.

Despite the public financing market being effectively closed to the gold mining industry, McEwen notes that public companies are essential for entrepreneurs such as himself to provide capital, making dreams and visions a reality. This, in turn, creates employment and generates taxes, wealth and, frequently, large philanthropic contributions to bolster the health, education and welfare of society.

However, one aspect of public markets that McEwen finds increasingly frustrating and disappointing is the continuing proliferation of rules and regulations, which creates confu-sion. In his opinion, financial statements are no longer easy to read or understand, and secur-ities regulations are rendering shareholder com-munications and filings unnecessarily lengthy and obtuse.

“More frequently, they are used by shareowners as doorstops or paper weights [instead of] an information source. “Management and boards are spending far too much time on compliance matters [rather] than on [finding] ways to build value for their shareowners, employees and the communities they operate in. “We have to return to concise, clear communi-cation and rules,” McEwen says.

Another key driver that can accelerate the rate of change in the gold mining industry is the increased involvement of private capital.

“Private capital can be impatient, which is good as it will want the industry to behave differently. It will bring a new set of eyes to old problems, lean hard on existing practices, [and] import attitudes and technologies from other industries that improve productivity [and] profitability,” he says, noting that private capital often wants its money to grow faster than the industry has become used to.

“It is a more demanding source of capital that will enhance the attractiveness of the industry to other investors.”

McEwen has set a strategic goal for McEwen Mining to get into the S&P 500 Index to gain a competitive advantage, as there is currently only one gold company in the index.