Florida, USA — MININGREVIEW.COM — 05 March 2010 – AngloGold Ashanti Limited “’ Africa’s largest producer of bullion “’ says it is moving ahead with plans explore under the sea for the precious metal as mining companies scramble to replace increasingly scarce reserves.
“AngloGold “’ which recently founded a marine exploration company with diamond giant De Beers “’ is to spend US$40 million (R300 million) in the next three to five years to explore undersea deposits,” CEO Mark Cutifani said in an interview with Bloomberg News at the BMO Capital Markets annual Global Metals and Mining Conference in Hollywood, Florida. “The venture started operations off New Zealand’s coast, and may move to sites off South America and Canada,” he added.
Bullion producers are trying to boost reserves after gold rose more than fourfold during nine straight years of gains. A dearth of high-grade deposits in traditional mining regions such as the United States, Mexico and Australia is pushing miners into more difficult terrain, physically and politically, analysts and executives attending the conference said.
“New discoveries are declining, and the replacement ratio is going down,” said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management. “That’s why these producers have to go to more challenging areas, even offshore.”
“Remote sensing and satellite technology has enabled the mining industry to look in places it had never gone before,” added David Christensen, CEO of ASA Limited, a US$5.25 billion (R40 billion) closed-end fund that invests in mining companies. “Subsea research is a natural extension of these changes and companies that get in first will have an advantage,” he added.
“The undersea search for gold by AngloGold shows you how tough it is to replace reserves “’ you’re basically fighting nature now,” said Sean Boyd, CEO of Agnico-Eagle Mines Limited, which is in the process of opening a mine in Canada’s remote Nunavut territory this quarter.