RTRS: Gold price of $1 000/oz in 2009 – Gold Fields CEO
JOHANNESBURG (miningweekly.com) - A higher gold price was on the way with $1 000/oz possible in 2009, Gold Fields CEO Nick Holland said on Wednesday.
“I still remain firmly of the view that we are going to see a higher gold price. I still believe we could see $1 000/oz during 2009,” Holland told Mining Weekly Online.
Holland said that the current market contagion had resulted in an “indiscriminate” selling down “even of gold, to some extent” and the base-metals pullback had dragged gold down with it.
“But gold will regain its value relative to everything else, particularly as all the major currencies of the world were trading on negative real interest rates and inflation was picking up, which are all of the ingredients for a stronger gold price,” Holland told Mining Weekly Online.
Also, worldwide gold production was under pressure, “never so more than now” given the difficulties in raising project finance.
“We are going to go into a much better period; we’ve just got to be patient,” Holland added.
On the benefit of the record rand gold price and record Australian dollar gold price, he said that the South African rand gold price had risen by between R40 000 and R50 000/kg.
“Straight away we are going to benefit from that in our South African production, an immediate benefit, and then, in particular, as we restore production in South Africa closer to historical levels, that will give us a further bonanza.
“It’s actually quite opportune for us at a time when we are starting to get our production back up,” he said.
Increased Gold Fields production in Australia was also “very opportune” as the Australian gold price had now risen from A$1 000/oz to A$1 200/oz, a 20% increase.
“That all flows through to the bottom line and it’s very opportune for us to get these increases and we must take advantage of it,” Holland said.
On new projects coming through on three continents as well as South African operations normalising, but with enhanced safety, Holland said that Gold Fields was positioned to advance from 798 000 oz of production in the September quarter to 1-million ounces a quarter.
“That’s going to have a very material impact on the bottom line,” he said.
With Cerro Corona, the Tarkwa expansion, St Ives and the rehabilitated South African assets coming together at a time higher gold price in the currency of the various countries, “I think we could be well placed to make some decent money”.
