Faces with booming demand, the Gold mining industry needs to start finding new reserves urgently...
DAVID J.HALL, chairman of Horizonte Minerals plc – the AIM-listed exploration and development company in London, focused on Brazil and Peru – says that he has never seen Gold or silver prices rise so fast during his career.
"In the 27 years of my career as a geologist, the market has not seen $900+ per ounce gold, $18 per ounce silver, or $2,000 per ounce platinum," he said at the announcement of Horizante's results for the year ending Dec. 2007.
"The resurgence in worldwide demand led by China has left the markets of most mineral commodities tight, with the subsequent high prices reflecting the lack of exploration and significant mine development in the late 1990s and early 2000s," Hall added.
"On the flip side, the global effect of the US induced credit crisis and the potential recession in the world's economy is expected to soften most metal prices in 2008," he went on, pointing to the Mineral Economics Group's special report for PDAC 2008.
But "continued strong economic growth and infrastructure development in the so-called BRIC countries (Brazil, Russia, India and China) and the rising need to upgrade and replace ageing infrastructure in many established economies should keep demand robust," Hall believes, "thereby keeping commodity markets tight and in turn, supporting metal prices above their long term averages."
Looking ahead, the mining industry as a whole faces a "critical need for reserve replacement" says Hall.