The upbeat soundings among international banks and investment companies regarding the likely movement in the price of gold in the short to medium term are manifested in predictions ranging from US$2,000.00 an ounce by year end to one particular prediction of US$5,000.00 an ounce in the foreseeable future. All of this, of course, is based on speculation, admittedly, in some cases, informed speculation, with one of the key considerations being the extent to which ongoing gold exploration projects in various parts of the world will alter supplies of gold on the world market in the foreseeable future.

Optimism regarding high prices would appear to suggest that the gap between exploitation and exploration could, in most cases, be considerable, given the vast investment sums required to proceed with the latter pursuit.

This issue is directly relevant to the economic interests of the gold-mining countries of South America including Brazil, Colombia, Argentina, Peru, Chile, Ecuador, Venezuela and, of course, Guyana, all of which are pursuing large, private sector-driven gold exploration projects. Here, Venezuela may be something of an “odd man out,” given President Hugo Chavez’s increasingly insistent soundings regarding the planned nationalization of his country’s gold industry.

Guyana is by far the smallest of the gold producers among the named countries, both in terms of annual production and estimated reserves. More than that, the outlook of the local gold sector does not appear reflect the longer-term optimism of other gold-producing countries in the hemisphere.

For a start, the Guyana Gold and Diamond Miners Association (GGDMA), which is perhaps best-positioned to provide an objective perspective on the state of the industry, does not appear to share the optimism of the international banks and investment companies regarding the future direction of gold prices, asserting instead that prices are likely to “level off.” More than that, the industry’s analysis of the future of gold’s contribution to the country’s economy is informed by the view that the state’s environmentally-driven mining policies are creating less “elbow room” for mining. It continues to point, for example, to what it now believes has been a futile request to government for the expansion of gold mining areas to four per cent of the total gold-bearing areas. Here, the feeling appears to exist that while official insistence on more environmentally sound mining policies is both necessary and acceptable, the high profile Low Carbon Development Strategy (LCDS) is failing to strike the correct balance between economic concerns and environmental imperatives.

Still, there appears to be no shortage of investor interest in the local gold-mining sector among foreign companies though the GGDMA, for example, is weighing the cost of official mining strictures against the potential economic benefits of increased gold production, setting aside, it seems, an earlier assessment that the industry can yield up to 500,000 ounces annually. Although it is a target decidedly modest by South American standards, it would amount to crowning success for the local mining industry.

The multi-million dollar questions, of course, have to do, first, with whether or not government and the private sector can arrive at a Modus Vivendi that accommodates both environmental considerations and the expansion of the gold mining sector and, secondly, how quickly the exploration work that is currently underway in Guyana can be transformed into investment in exploitation. As far as the first issue is concerned, the government appears to be holding a line—a circumstance which the GGDMA says has placed the industry in “a state of flux.” On the second issue, and given the number of ongoing gold exploration projects currently underway elsewhere in South America, the demand for the much larger investments in gold exploitation may well impact on the speed with which at least some of the exploration projects here transform themselves into full-fledged gold-mining projects.

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