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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (1669)	7/22/2001 11:09:18 AM
From: russwinter	Read Replies (2) \| Respond to of 4051

My work suggests that the trouble is not in the largest mines, but the lower tiers. In fact if you look at reserves in the top 20 operations in the world there are only two running low: Meikle and Round Mountain. There are a couple more South African mines that I believe overstate true reserves because of the high capex (and high current cash costs, dependance on "free" labor) necessary to open up new underground activities: Dreifontein, Kloof, Randfontein. So really only about five are suspect in terms of making it to 2005. But when you shift to the next tiers it's a different story. Among the larger producers I've covered so far (there are more), I would also suggest that anybody betting on extended mine lives take a hard look at four variables: current cash costs over 200, exploration budgets, announced exploration results, stressed financial strength and poor capital access: Likely depleted by 2005: Kori Kollo (NEM): 250K, cc 200 Mesquite (NEM): 60K, cc 200 Minhasa (NEM): 320K, political risk Indonesia Golden Giant (NEM): 300K Vera/Nancy (NEM): 125K Rand (GLG): 75K, cc 219 Jerritt Canyon (MDG): 340K cc 219 Beartrack (MDG): 72K Misima (PDG): 200K Golden Sunlight (PDG): 200K Bald Mountain (PDG): 100K cc 256 Dome (PDG): 300k cc 200 Gosowong (NEW): 275K New Celebration (Hill 50): 70K Telfer (NEW): 267K cc 220 Omni (CBJ): 360K cc 213 Sleeping Giant (CBJ): 33K cc 205 Mt. Muro (Aurora): 253K Briggs (Canyon Res): 87K Castle Mt. (Vic)119 K cc 222 Yilgarn Star (Gwalia): 72K cc 200 Bullfinch (Gwalia): 67K Ruby Hill (HM): 120K Homestake (HM): 170K McLaughlin (HM): 116K Hemlo (HM): 633K cc 210 Lawlers (HM): 100K cc 210 Plutonic (HM): 225K cc 190 New Britannia (TVX/NDY/HRC): 110K cc 213 Mt. Leyson (NDY): 240K Navachab (AU): 77K Serra Grande (AU): 96K Tanami (AU): 110K cc 286 Union Reefs (AU): 127K cc 274 Bambanani (AU): 441K cc 272 Matjhabeng (AU): 368K cc 287 Savuka (AU): 272K cc 247 Mponeng (AU) 402K cc 238, has reserves but cost is problem. Note: If SA goes on serious strike or labor costs increase, questionable if the last six mines ever open back up. Freda-Rebecca (ASL): 100K cc 229 Bibiani (ASL): 232K Kidston (PDG): 255K Bousquet (ABX): 153K cc 220 Holt-McDermott (ABX): 93K El Indio (ABX): 171K Refugio (BGO/KGC): 170K Hoyle Pond (KGC): 140K Wassa (Glencar): 110K Bogoso (GSR): 110K cc 210 Just (I'm not done, may never get done!) this list totals 8.8 million oz, 11% of world production, and I haven't even gone into high cost South Africans with so called large reserves (Goldfields, DROOY, HGMCY) that are going to be in big trouble if they lose their quasi-slave labor. I think mines like Boddington, Pajingo, and Bata Hijau are in the twilight zone too, but I'm trying to be conservative <g>. There are some offsets such as Grasburg's expansion that you were quick to point out. Yanacocha will expand 250K, and there are the new mines coming on at Buly 500K, Rodeo 350K, Moab 750K. There may be a few more? This production downturn will look like a big iceberg in warm waters. Melting away, with big chunks falling off from time to time. Short term I am particularly interested in this grossly overlooked SA labor situation.