Gold majors debt-free and ready to acquire, says Lundin

Brien Lundin, editor of Gold Newsletter, points out that top gold producers have cleared all net debt through record earnings. After maxing out dividends and buybacks, they will need to acquire large projects, ushering in the next leg of the bull market. "The big producers are making so much money that they have no debt on a net basis," he states.

Average all-in sustaining cost margins hit a record $3,076 per ounce in Q1, up 134% year-over-year. Gold trades at $4,390.60 with AISC at $1,785 per ounce. Lundin welcomes rising costs as a sign of lower-grade ore processing at elevated prices. Royalties have doubled to 12% of expenses.

He favors projects in North America, Mexico and Latin America where high prices overcome most hurdles except permitting. Investors should watch for dilution in juniors, though fresh financing supports the best drilling results seen in years.