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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who started this subject	4/4/2002 8:13:59 PM
From: russwinter	Read Replies (1) of 39344

Global gold mine supply seen in sharp decline Reuters, 04.04.02, 7:03 AM ET LONDON, April 4 (Reuters) - World supply of mined gold may plummet by nearly 30 percent by 2010 unless bullion prices rally and prompt miners to bring untapped deposits on stream, a mining study showed on Thursday. Toronto-based mining investment banking and research firm Beacon Group Advisors forecast global gold output falling this year for the first time in two decades, reflecting years of low prices and slashed exploration budgets. Supplies should continue to fall, with the decline accelerating after 2006 as output dropped from mature mines in the United States and Canada. "A gold price above $325 is needed to prevent the decline," Beacon Group managing director Don MacLean told a mining conference where the study was presented. The findings are likely to encourage gold market bulls who see the prospect of reduced mine supply driving prices above $300 a troy ounce, where bullion has been capped for most of the past two years. ENVIRONMENT Beacon Group's modelling showed global output below 60 million ounces by 2010, down from current levels around 83 million, if bullion prices averaged $275. Even projections based on a price of $300 and incorporating planned new mine developments showed output falling sharply after 2006 to post a 22 percent drop from current levels. North American output was seen falling 54 percent by 2010 assuming a base price of $275. The fall would be 41 percent at a price of $300 as mines matured and environment permits for new mines became more difficult to secure.

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