TORONTO (miningweekly.com) - Investors in Asia are looking increasingly closely at gold equities, and companies would be wise to pay attention, says David Garofalo, CFO at Agnico-Eagle Mines.
Garofalo, who was named Canada's CFO of the year for 2009, has just returned from a marketing trip that included meetings in Tokyo, Singapore, Hong Kong and, for the first time, Beijing.
"It's remarkable how underinvested that market is in gold as an asset class," he said in Toronto on Wednesday.
"It's very much an early market, and it is a market with significant inflows of capital."
Speaking on the sidelines of an industry event hosted by consultancy GFMS, Garofalo said he expects to see more and more resources companies looking to access Asian markets.
"Down the road, I wouldn't be surprised to see more gold mining companies start to tap that market more aggressively."
However, although the company has made progress in building an Asian investor base, Agnico-Eagle is well capitalised, so it will not be looking at listing its shares on an Asian exchange.
Garofalo has made the trip to Asia for the last four years, but visited Beijing for the first time this year to meet with State-run funds.
"There is a lot of capital, and that capital is largely uninvested – they are looking for things to invest in," he said.
"And in China, they are just starting to look outwardly in terms of foreign equities, never mind gold as an asset class.
Singaporean investors have been aggressively investing in gold companies since the 1990s, but they have lately been joined by investors in Japan, which are already active in Canadian oil sands, but are now looking more carefully at gold and base-metal equities, Garafalo said.
Value-focused Hong Kong has traditionally been a difficult audience, but since many other asset classes collapsed in 2008, investors there are a lot more receptive to North American gold equities.
"They are starting to look at gold and say, 'you know what, it retained its value, maybe we should start to look at this a little more carefully'."
In the last 12 months, several Canadian companies have announced investments by Asian companies, including Teck Resources' sale of 17% in itself to State-owned China Investment Corp for $1,5-billion.