Scaling back likely in gold production figures

- but prices not at ‘tipping point’, Sparman says

Amid concerns about significantly reduced gold production in the face of falling world market prices, Stabroek Business has learnt that the sector will almost certainly have to effect a downward adjustment in its projection for gold production this year.

“Unless we start hitting sixes and hitting quite a few of them there is every chance that the sector will not accomplish what we had hoped it would this year,” Administrative Coordinator of the Guyana Gold and Diamond Miners Association (GGDMA) Colin Sparman said earlier this week.

And while the mining sector official was unable to say whether and to what extent the decline in gold production was due to hoarding or smuggling, he said there was evidence that some miners were “shrinking” their operations and that might have to do with “other factors” in the mining sector.

At the end of 2013 the gold mining sector declared a production figure of 481,000 ounces and Sparman said that the expectation was that this year’s production would “top 500,000 ounces.” However, Sparman said in a telephone interview with this newspaper earlier this week that to date, “production figures do not appear to support such a declaration.”

Sparman, meanwhile, is sticking with his assessment given to this newspaper some months ago that gold prices would have to “tumble” to a level below US$1,000 to give rise to anything “resembling serious general concern” in the local mining sector. “That remains my view and the price has not reached that US$1,000 mark. The problem is that it’s hard to say which direction prices are heading in,” he added.

Asked about reports of partial cessation of operations by some miners, Sparman said those reports were accurate. He said there were miners who had made “significant new investments” in the sector and were finding it “challenging” to continue to operate at the prevailing price levels. “I am aware of actual cases in which miners have had to pursue scaling back their operations, including working fewer dredges and cutting back on staff as an option,” Sparman said, though he insisted that the situation had not reached what he described the “tipping point.”

Sparman told Stabroek Business that he believed government and miners were “making good progress” in an ongoing collaborative effort to support the continued growth of the industry at what he described as “a challenging time.” He said some concessions like reduced prices for fuel and concessions in terms of fuel were already in place and arrangements for duty-free concessions on vehicles to be used specifically in the sector were “proceeding.”

And according to Sparman, the GGDMA is continuing to lobby government to open up new mining areas to allow more small miners to operate. He said that despite current price levels there were several persons who were still prepared to become involved in the sector. “What we need are more lotteries for the allocation of land for mining. Larger numbers of small miners can add significantly to the overall gold yield,” Sparman said.


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Kitco Market Data

Gold Prices for the three-day period ending Thursday August 17, 2017           Kitco is a Canadian company that buys and sells precious metals such as gold, copper and silver.

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