 Bloomberg Opinion -- Golds record run to almost 2,000 an ounce has burnished cash flows and driven a surge in shares of bullion producers. The rally provides a renewed test of discipline for Barrick Gold Corp. and peers after a similar climb a decade ago prompted a spate of inflated deals and overly optimistic investments that wasted billions.The 2020 redux isnt being fueled by traditional demand: The China Gold Association says consumption in the worlds biggest buyer plunged by more than a third in the first half. Instead, its a combination of low bond yields, pandemic worries and institutional investor appetite. Silver has also rallied, breaking through 24 an ounce this week to its highest since 2013. Precious metals arent always predictable, but Covids stubborn resistance means the general picture is unlikely to change soon.For gold-mining companies, this is becoming a test of memories. With costs contained even after pandemic-related closures, virtually all are churning out impressive cash: In the first three months, Toronto-based Barrick alone generated 438 million in free cash flow based on a realized price of not far off 1,600, compared to 146 million a year earlier. Valuations look better too, especially for the sectors largest players.Thats a temptation to expand for those like Barrick Chief Executive Officer Mark Bristow who are facing constrained production growth and a metal price thats likely to be supported for some time yet. Recall, though, just how bad things got around 10 years ago, when prices last glittered this brightly. In 2017, chastising the industry, the hedge fund of longtime gold bull John Paulson put the gold mining sectors cumulative impairments since 2010 at 85 billion. According to the same presentation, 80 of the value of the top eight deals was impaired. Enough to give todays executive pause.The starting gun for this wave of gold deals has already been fired. That began with some operational logic and a dash of hubris, when Barrick announced plans to tie up with Africa-focused Randgold Resources Ltd. in 2018, only to bid unsuccessfully for Newmont Mining Corp. months later, when the target was buying Goldcorp Inc. More significant for what comes next, however, is that premiums were non-existent or modest; Barrick and Newmont never did combine, and ended up agreeing a more sensible joint venture in Nevada.For an industry trying to woo back generalist investors and regain credibility, Chris LaFemina of Jefferies points out, the model is still pre-merger Randgold: a high dividend, net cash, no value-destroying share issues. Shiny prices havent changed that yet.This year it is Chinas bullion miners that have driven much of the action, in search of market clout and increased relevance. Shandong Gold Mining Co. agreed to buy Canadas TMAC Resources Inc. in May, a deal now facing some local opposition, and has also battled Russias Nord Gold SE for West Africa-focused Cardinal Resources Ltd. No less acquisitive, Zijin Mining Group Co. agreed last month to buy Canada-headquartered Guyana Goldfields Inc. for 240 million. Expect that to continue.Paying out the 2020 windfall in dividends may be no bad thing, given how fast gold can turn. Investors will cheer. Still, if prices stay high, diggers can capitalize on the current excitement by encouraging a little more risk to tackle the problem of stagnant production. Its true that there were as many terrible greenfield projects in the past boom as there were bad MA deals, but there is an extra incentive to bet on the yellow metal: Extra supply doesnt tend to erode the gold price.Miners will need to invest 37 billion by 2025 to keep output at 2019 levels, Wood Mackenzie Ltd. estimates. Not all of those projects will be in top destinations, or easy to extract. Gold at 2,000 might just make a return to minings buccaneering roots attractive enough. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.comopinionSubscribe now to stay ahead with the most trusted business news source.2020 Bloomberg L.P. 