Newmont Mining Corp’s (NEM.N: Quote, Profile, Research, Stock Buzz) new Boddington mine in Australia should produce 300,000 to 500,000 ounces of gold this year and account for almost 20 percent of the company’s total production by some time next year, its chief executive said on Wednesday.
Richard O’Brien also told the Reuters Global Mining and Steel Summit that he sees gold trading in a range between $900 and $1,200 per ounce over the next few years, supported by lower industry output and inflation concerns.
“I will be surprised to see gold on average below $900 this year,” O’Brien said. “If you take the highest gold price in the 80′s and escalate it into today’s dollars, you get a number around $2,000 an ounce.
“I don’t see that particular number as being out there, but there is clearly upward mobility…and I do think we’re in a trading range of $900 to $1,100 or $1,200 over the next several years.”
The price of gold went through the $1,000 per-ounce barrier last month — an 11-month high. But it has dropped back since then and was around $907 in London on Wednesday.
O’Brien said gold producers should see expanded profit margins this year as a result of the high gold price, while Newmont also will benefit from production starting-up of Boddington, in Western Australia.