<not a linear 1:1 relationship>
Maybe not linear, but when you start hitting these 250, 260, 270 numbers, it starts getting close. A drop from 275 to 250 will have a greater effect on reserves, than 325 to 300.
<Replacement of production?>
Again you had some pipeline left from the 1996-97 exploration pre-Bre-X glory days. It's now gone.
<remind me of this on March 11, 2006>
If gold stays below 300 through March, 2006, most of this industry will shutting or winding down. Even the MDG's and GLG's can't afford to just to cruise along on current projects. I would fully expect a huge chunk of production to have gone to mine heaven will before 06. In fact I think that may be behind the credit rerating possibly underway from the CB's. They have to be worried about the whole hedging scheme and the poor health of the industry. They may be wondering if the gold to repay their loans ever gets produced.
I understand your counterpoint to the "depletionist" view common during the late 70's and early 80's. I don't subscribe to that notion either. However, it takes capital and investment and the right price level to cure depletion. And from where we stand today, that cure is no where in sight. If capital came rushing back into the sector, then I would IN TIME expect a cure. But, that won't happen until we get higher prices. Resources won't materialize out of thin air, nor will gold given the current round of puny exploration budgets. |
