The digital currency Bitcoin is not a fundamental threat to the value of gold, according to the managing director of ‘s biggest gold miner Newcrest Mining.
???”A store of value, and maybe I’m too much of a traditionalist, in my view has to be something you can feel and touch. So a store of value, like gold, or it used to be silver or other precious metals, in my view is a true store of value,” Newcrest chief Sandeep Biswas said on the sidelines of Newcrest’s annual general meeting, held in Melbourne on Tuesday.
“Because it doesn’t matter what happens, if you’ve got your arm around that gold that’s yours, for example. The thing with Bitcoin and other currencies, it’s got to be backed by something, so currencies are backed by government, that’s fine, Bitcoin is backed by security or its uniqueness.
“So I see Bitcoin as more of a currency than a store of value, such as a precious metal such as gold. So I don’t really see, (and) I know there’s a lot of talk about it, but I don’t see Bitcoin as a fundamental threat to the value of gold. It’s just introducing a new age currency into the mix of old age currencies.”
Newcrest’s chairman, Peter Hay, said to the extent that Bitcoin was “used as a store of value by people it doesn’t seem to be affecting the gold market at all. And there’s no noticeable effect on gold”.
Mr Biswas also outlined a bright future for demand for gold.
“The key drivers for gold I see as wealth… China’s got a steep trajectory in terms of wealth, India is well down that pathway. Gold has always been and I think will continue to be a mix in these people’s portfolio. And I think that’s really important,” Mr Biswas said.
“And then the other thing going for gold, and it comes back to deeper ore bodies, it’s getting harder to find. So you’ve got something that’s valuable, it is a genuine store of value, it’s physical, you’ve got people becoming wealthier and it’s becoming scarcer and scarcer. That I think long-term bodes well for gold, but in the short term it can be volatile,” he said.
Mr Biswas gave shareholders clear signals on Newcrest’s interest in growth.
“Looking ahead, we will look for further profitable growth opportunities, whether that be by investment in exploration, early stage project entry, application of step-change technology and innovation, or through acquisitions,” Mr Biswas said.
“It would be great to have more tier one assets or development projects in the Newcrest portfolio. I feel we have three now – in the form of Cadia, Lihir and Wafi-Golpu. Newcrest will assess opportunities based on their ability to add value for Newcrest shareholders.”
Mr Hay told shareholders that with the company’s balance sheet now stronger and the company turnaround progressing well “we are in a position to start pivoting more towards growth”.
“Our highly experienced Exploration team is targeting ore bodies that fit our skill set. This includes shallow, open pit potential in West Africa, but also involves looking deeper for gold/copper porphyries in Central and South America and the Asia Pacific area. Our most advanced project is of course at Wafi-Golpu – a world class gold and copper-gold deposit in Papua New Guinea,” he said.
Shares in Newcrest Mining eased 12 cents on Tuesday to close at $23.22.