The large majority of senior executives at the world’s largest gold mining companies see the yellow metal advancing for a 12th consecutive year in 2012.
In PricewaterhouseCoopers’ (PwC) 2012 Gold Price Report, 80% of respondents – from among 40 gold companies – predicted that the price of gold will move higher this year. The highest estimate came in at $2,500 per ounce, the average forecast was $1,985.29, and many estimates were clustered around the $2,000 level.
If the yellow metal does indeed move higher, as most executives are predicting, the companies’ balance sheets are likely to see a considerable increase in cash. In light of this, the Gold Price Report also asked how the executives would use at least a portion of a potential increase in cash flow in the coming year. Project development was the top answer, at 75% of respondents, while 29% identified acquisitions and 25% pointed to dividends (the response choices were not mutually exclusive).
With regard specifically to acquisitions, 57% of the respondents said they “anticipate funding for M&A and capital expenditures to be readily available.”
The full version of the Report is available below:
http://www.pwc.com/ca/en/mining/publications/gold-price-survey-2012-en-v2.pdf
Platinum Group Metals Moves Forward Toward Production
In August, Platinum Group Metals entered into a mandate letter with a consortium of financial institutions – including Barclays Capital and the Standard Bank of South Africa Limited – for a $260 million project finance loan to enhance the development of the Western Bushveld Joint Venture (WBJV) Project 1 Platinum Mine. Full Platinum Group Metals News Release.
- Preparation of detailed banking documents for the senior loan facility with the mandated syndicate of banks is ongoing
- The completion of this documentation, due diligence, hedging establishment and off take negotiations are expected to be completed during Q1 and Q2 of calendar 2012
- Project 1 is advancing towards a 275,000 ounce per year platinum, palladium, rhodium and gold planned production profile
- Full commercial construction is budgeted at $443 million and initial commercial production is scheduled for late 2013
