Capital Group’s move into gold could mark turning point for sector – by Andrew Willis (Globe and Mail – June 3, 2017)

When known gold bug Frank Giustra bangs the drum for a new precious metal play, as he did back in February, no one takes much notice.

When one of the world’s largest money managers, Capital Group Companies Inc., joins the move into gold by discreetly taking stakes in iconic Canadian companies Agnico Eagle Mines Ltd. and Barrick Gold Corp., heads turn – and it’s time to ask if the next bullion bull market is just around the corner.

While most of the investing world was ignoring gold stocks this winter, Mr. Giustra got serious about his latest project, as Vancouver-based Leagold Mining Corp. raised approximately $400-million to buy a Mexican property. Mr. Giustra, legendary for his ability to pick promising junior miners, is chairman of Leagold.

And this spring, we recently learned that Capital Group got into the gold game by committing more than $1-billion to Agnico Eagle and Barrick. That qualifies as a contrarian move from the Los Angeles-based asset manager, which boasts an 80-year track record and invests $1.47-trillion (U.S.) for individual and institutional clients.

The price of gold went off a cliff four years ago and has gone sideways ever since. The prolonged slump weighed on mining stocks, as many precious metal producers struggle to pay down debt taken on in better times.

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