Kinross Gold CEO suggests mining may be in price dynamics perfect storm
Kinross Gold's Tye Burt is very bullish on mining prospects in the fledging Ecuadorian mining industry.
Posted: Thursday , 17 Sep 2009
RENO, NV -
Kinross CEO Tye Burt advised metals analysts and fund managers Wednesday, we "may be in the midst of a perfect storm in terms of price dynamics" as "we see serious supply constraints' in the future.
In a presentation to the Denver Gold Forum, Burt praised the overtures of Ecuador's President Rafael Correa to establish a modern mining industry in the country.
Burt presented charts which revealed global gold production peaked in 2001 as the demand for gold has soared. Meanwhile major gold discoveries have substantially declined since 2007.
Meanwhile, the freeze on mining in Ecuador is about to be lifted, Burt noted, as Correa "delivered on all he promised" to reestablish mining in his country.
"President Correa is extremely committed to moving new mining development forward," Burt added, praising Ecuador's "very rich" mineral endowment.
Burt described Kinross' Fruta del Norte gold prospect as "easily one of the best new deposits in the world of this generation." Among the project's recent milestones is approval of its environmental management plan by Ecuadorian officials.
Kinross is now waiting for final approval to begin a 12,000 meter drilling program, and will complete a pre-feasibility study and upgrade its gold and silver resource category. The company plans to spend $25 million this year on Fruta del Norte.
Ecuador has not yet defined the amount of windfall profits tax to be imposed on Fruta del Norte project. Instead, the taxation will be discussed and specified in the development agreement for the project, Burt explained.
In response to a question, Burt stressed Kinross has no desire to operate a diamond mine albeit the company recently acquired 20% in Harry Winston, the joint venture partner with Rio Tinto in the Diavik diamond mine operated by Rio Tinto in Canada.
Burt explained that Kinross enjoyed a tax advantage in being a Canadian mining company investing in Diavik. The company's acquisition of Diavik "does not signal a left or right hand turn for us" as a mining company, he added.
Nevertheless, Kinross is "very happy with the value" of its Harry Winston investment, he noted.