Gold News

Production projection revision could prompt gold investment

News that China Goldmines has significantly revised its gold production forecast could lead to an increasing number of people investing in gold.

With China Goldmines' production expectations for 2008 down 75 per cent, supply concerns could push up the gold price, making gold investment a more attractive proposition.

China Goldmines' volte face has primarily been blamed on power supply problems, Reuters reports, but it can also be attributed to delays in attempts to increase production due to underground mine renovation setbacks.

Other problems include a particularly unaccommodating winter and poor gold grades.

Consequently, just 5,000 ounces to 6,000 ounces are expected to have been produced by the gold company in the year ending December 31st.

This is opposed to the previous assumption of 20,000 ounces.

The announcement by the company, which is based in China's Hunan province, prompted a fall in share price of ten per cent.

To add to the gold production fears, mining production in Zimbabwe has fallen sharply due to a shortage of cash prompted by the country's central bank's lack of liquidity.

Chamber of Mines figures suggest production is down to 265 pounds a month from a peak of 2.2 tons ten years ago, the Associated Press says.

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