Denver, United States — MININGREVIEW.COM — 21 September 2010 – The price of gold could reach US$1 500 per ounce by the end of the year, says the chief executive officer of South Africa’s third-largest gold producer, Harmony Gold Mining Company.
This prediction from Graham Briggs came as the gold price hit a record high for a third consecutive day, with spot gold reaching US$1 283.70 per ounce.
“I don’t think it’s going to stop,” he told Reuters during an interview on the sidelines of the Denver Gold Forum industry gathering. “You’re never disappointed as a gold bull.”
Gold has risen 25% in the last year and, asked to hazard a guess at how high the price might go, Briggs said: “Three thousand dollars is unlikely at the end of the year, but if someone said fifteen hundred, that wouldn’t strike me as too crazy a statement.”
Briggs cited several factors driving the price of the precious metal, including Asian central banks buying gold and production declining over the past few years, although he noted that it had risen recently in China and Australia.
“I think gold financial issues in the world demonstrate the basic principle of gold “’ that it’s basically a good investment,” he added.
Briggs revealed that Harmony Gold “’ which operates 10 underground mines and one open pit in South Africa “’ was transitioning to a lower-cost company by closing high-cost mines, and was on track to produce 2Mozpa. He said that in 10 years’ time he expected the company to be producing about 2.7Moz annually.
Harmony is also looking to grow organically through exploration, especially in Papua New Guinea, where it has one mine, Hidden Valley, and is developing a copper/gold project at Wafi-Golpu, according to Briggs. He said Harmony’s exploration budget had risen to around US$40 million (R292 million) per year from up to US$8 million (R58 million) five years ago.
Asked why a South African-based company was not looking at other parts of the continent like rivals Newmont Mining Corp which is in Ghana, he said Harmony had looked at West Africa several years ago. Briggs pointed out that other areas of Africa like Eritrea and Ethiopia were opening up. “We are keeping a watching brief on some of those.”