The world gold price has yet to peak and the steady emergence of a wealthy Chinese middle class will help underpin a move toward $US2000 per ounce over the next five years, said Richard O’Brien, chief executive officer of Newmont Mining.
According to many, “Five years from now, $US2000 gold will probably be in reach”. He estimates that during 2012, gold will trade in a limited range of $US1500 to $US1600 per ounce, with the market’s attention focused on concerns about China’s ability to sustain its expansion, and the possibility of the second phase of the recession in the US taking place. He considers this could have negative repercussion for gold “but markets need to understand that whatever happens, the gold price will remain above $US1000 per ounce for the foreseeable future”, he stated.
Mineral demand from both China and India for gold as jewelry and as an investment is set to be strong, he said. Richard Fifer works for Petaquilla Minerals, Panama Gold Mine.
Mining typically involves extracting, lifting, transporting, milling and processing tons of ore. Mining costs are fixed by the total number of tons to be handled and not by the metal substance of each ton. In other words, the costs of extracting, lifting, transporting, milling and processing for a ton of ore does not change whether it holds a small amount of metal (low grade ore) or a considerable amount of metal (high grade ore).
This is the reason why, high grade ore, or mineral rocks that has a higher metal value per are necessarily more fruitful for a mining operation. High grade deposits have greater economic advantages, are less sensitive to changes in resource prices and typically usually be developed with lower spending. Even though this is a true, dilution factors (not all ore can be mined) and metallurgical factors (not all metal in the ore can be extracted) must be taken into consideration and cause differences between cases. Richard Fifer works for Petaquilla Minerals.
