GOLD NEWS

Newmont chief opens Boddington mine, believes gold could hit US$1,350/ounce this year

The president of global gold mining giant Newmont Mining Corporation warmed the hearts of Western Australians by officially opening the State's biggest ever gold mine and also pleased the gold bulls with a forecast on the precious metal's price.

PERTH - - 

The gold price could rise to US$1,350/oz this year, says Newmont President Richard O'Brien who adds the yellow metal "is a safe currency."

In his address at the opening of the company's 100% owned Boddington mine, south of Perth, he said a robust gold price would guarantee the viability of the company's huge low-grade Boddington mine which, with its massive milling capacity, will produce 1 million oz of gold per annum

A mine of this size overshadows any other single mining operation in Australia, including the big Super Pit operation in Kalgoorlie owned jointly by Barrack Gold Mines and Newmont.

Boddington will ramp up to full production by the end of the year and would be a void matching the Super Pit by ending up 4 kilometres long, 1 km wide and 700 metres deep.

Boddington was originally a shallow open cut operation mined in the 1980s by other parties but the large hard-rock low grade project spent years under study in a consortium that changed with takeovers but ended up being Newmont, Newcrest Mining Ltd and AngloGold Ashanti - with the latter two selling out in recent years.

It was a A$3 billion (US$2.65 billion) development and O'Brien said Boddington was a cornerstone asset.

Intierra Resource Intelligence said Boddington has a proven-probable reserve of 793.67 million tonnes grading 0.786 grams/tonne gold and 0.11% copper, and measured to inferred resources of 918.86 Mt @ 0.529 g/t gold and 0.087% copper.

Western Australia's Premier Colin Barnett said Boddington would inject A$770 million (US$682 million) into the local economy every year for two decades, and the mine would lift the State's gold production 20%.

With the Federal Treasury having floated the idea of the Rudd Federal Government taking up or over the mining royalties managed by the States, Barnett decided to have a dig. He said Western Australia depended on royalties to support mining communities, and breaking this link with a Federal tax could undermine the industry.