Gold Mining Industry Faces Challenges Amidst Boom in Production

Strategic Insights -

Amidst a boom in gold production, Papua New Guinea's Lihir Gold Ltd. has retained its forecast for 2005 gold production, despite a slight decrease in first-quarter output. Meanwhile, Australian companies Sino Gold Ltd. and Harmony Gold Mining Co. Ltd. have reported declines in their gold output. Analysts are also scrutinizing the latest Commitment of Traders data from the Commodity Futures Trading Commission.

Key Takeaways:

  • Lihir Gold Ltd. has retained its forecast for 2005 gold production at 700,000 ounces, despite a decrease in first-quarter output to 101,370 ounces from 112,336 ounces in the 2004 first quarter.
  • Sino Gold Ltd.'s quarterly output from its gold operations in China fell 32% to 4,283 troy ounces, down from 6,309 ounces in the previous quarter.
  • Harmony Gold Mining Co. Ltd. reported a cash operating loss of 55 million rand ($1=ZAR6.0500) for the third quarter, compared to a profit of ZAR163 million in the second quarter.
  • Barrick Gold Corp. is planning to move massive blocks of glacial ice in Chile to extract gold underneath, as the company experiences a boom in investment.
  • Newmont Mining Corp. will hear from activists and NGOs at its annual meeting, who will voice concerns about the company's environmental policies.
  • Peru's private-sector Mining, Energy and Petroleum Society is concerned that the government might stop respecting stabilization treaties that give companies protection from tax changes.
  • Newmont Mining Corp. has asked the University of Colorado School of Medicine to conduct health assessments at its sites in Peru and Ghana.

Statistics:

  • Lihir Gold Ltd. produced 101,370 ounces of gold in the first quarter, a decrease from 112,336 ounces in the 2004 first quarter.
  • Sino Gold Ltd.'s quarterly output fell 32% to 4,283 troy ounces, down from 6,309 ounces in the previous quarter.
  • Harmony Gold Mining Co. Ltd. reported a cash operating loss of 55 million rand ($1=ZAR6.0500) for the third quarter.
  • Newmont Mining Corp. has 19 mining operations in 11 countries, including Peru and Ghana.
  • Barrick Gold Corp. has made an investment of $1 billion in new mines in South America.

Sources:

  • Dow Jones Commodities News via Comtex, Apr 26, 2005
  • Dow Jones Newswires; +44 (0)20 7842 9411; metals@dowjones.com
  • COMTEX (http://www.comtexnews.com)