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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?

To: Wade who wrote (6250)	11/9/2006 1:15:04 PM
From: sageyrain	Read Replies (1) \| Respond to of 48092

Cost pressure going forward: Newmont: Gold production costs to rise 25% in 2007 Source: Easy Bourse Gold production costs at Denver-based gold producer Newmont Mining Corp. (NEM) will rise to $370 an ounce during 2007, up nearly 25% on the preliminary 2006 production cost average of $297/oz, Chief Financial Officer Richard O'Brien said Thursday. Aside from general pressures from higher energy and labor costs that all gold miners are facing, higher production costs will be down to Newmont's drive to develop global reserves, O'Brien said. Costs have already risen to $318/oz during the third quarter, up from an average of $239/oz during 2005. "We focus on delivering leverage to the gold price. Gold prices have risen 40% during the first three quarters of 2006, while our operating cash flow has risen 80%," O'Brien said at the RBC Capital Markets gold conference. Construction at Newmont's project in Ahafo project in Ghana was "well underway" with start up scheduled at the end of 2006, the company said on its Web site. The Akyem project, also in Ghana, is expected to start in 2008 among other projects. Commenting on the gold industry's current merger and acquisition drive, O'Brien said Newmont hadn't found "projects that were better than our own project pipeline." "We don't feel the need to invest in other companies and this is why we can be opportunistic with our money to help diversify and add to our reserves," O'Brien said – such as acquiring an additional interest in the company's Boddington mine and some African assets. Following an expropriation of Newmont assets in Uzbekistan, the company was "not enthusiastic to venture into other '-stans' but we can't rule it out in the future. It is a question of when and under what circumstances," O'Brien said. metalsplace.com