Gold Forum starts on a positive note
Gold miners, explorers and financiers are meeting this week in the U.S. mining capital, Denver, amidst euphoria over the $1,000 gold price - but is this the new floor or will it be shortlived.
Mineweb - Author: Lawrence Williams Monday , 14 Sep 2009
DENVER - This year's Denver Gold Forum could hardly have been held at a more opportune time with gold having ended the previous week at over $1,000 an ounce - the first time it has achieved an end-week close at such a high level, and the organisers, and the participants, will be hoping it remains above the magic $1,000 figure when the conference opens officially today. This is the event's 20th Anniversary, and is, fittingly, going to be the biggest ever with around 900 pre-registered delegates - up from 720 a year ago.
To an extent the conference growth has not just been down to the high gold price, although this obviously helps, but is due to the broadening of participants allowed to present. The original concept was an event limited to +$250 million market cap companies - nowadays the entry level is much lower with junior miners and explorers welcomed - although they still need to be invited by the organisers as do the attendees. It's not an event where you can just turn up, pay the fee and expect to be admitted!
The opening registration and cocktail party was on Sunday evening and was extremely well attended and was accompanied by a busy seminar presented by Catherine Gignac of Sandfire Securities on Gold Equities investment.
All the great and the good - and presumably some of the not-so-good - in the gold sector are due to attend including the CEOs of virtually every Tier 1, 2 and 3 gold mining company, and those top analysts, bankers, financiers and commentators who specialise in precious metals investment.
At the opening cocktail party the general mood was upbeat to say the least, but there are obviously still issues which bring the sector down to earth. Resource nationalism and political risk in general is one such, with companies looking for gold in jurisdictions which may turn hostile for internal political reasons, while environmental activism from organisations which can see no benefits in mining is always a continuing irritant, although it does seem to have lost some of its teeth as the focus may well have, for the time being, moved from resource issues to climate change and global warming.
China and that country's burgeoning investment in resources will be another subject which will attract much discussion. Gold is dear to the Chinese psyche and whether it be direct investment in gold projects - and some explorers who have found huge deposits (and there are some!) may well be looking in this direction for funding when all else fails. But also there is belief that Chinese buying of the metal itself is underpinning the market, not to mention the likelihood that China is buying gold for its reserves in transactions which mean it does not need to report this to the IMF; what effect this will have on gold going forward?
Capital raising too remains an issue for bigger projects. ----.
One of the reasons, though, that this annual Denver event, is so popular with top mining execs is that it gives them the chance to discuss some of these matters with their peers, while the smaller companies may be hoping they can convince a bigger one to take an interest in their projects. There is little doubt that deals are done, or at least initiated, at events of this type.
Hedging, or de-hedging, will be another subject of discussion - particularly now that the world's largest gold miner, Barrick Gold, has announced it is to unwind its hedges - a sign that it thinks gold is definitely on the upward path. ---. In general it would seem that analysts feel that if the $1,000 level can be held, then there is the potential for a sharp price rise over the next few weeks - and if the dollar remains weak against other currencies and continues to fall then the odds of an increasing gold price rise further. ---.
