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  Gold Net Australia Online Magazine


  GOLD COMMENT - January 2006  

As gold reserves dwindle in the well known gold producing countries - the big end of the mining sector is rapidly expanding exploration. To look at just a few examples of just where the big guys are looking - it is clear that it is the under developed world that to date has essentially been ignored.

Trans Siberian Gold (TSG) has announced that it is to start developing the Asacha gold mine in Russia, subject to the completion of funding, and aims to begin producing gold from the site in 2008.

The plan that UK-based TSG has set out sees underground work beginning in August 2006, plant construction beginning in September and plant commissioning starting at the end of 2007, according to Metals Place.

It is estimated that the Asacha mine, located in the far east of Russia, will have a life of around 6.5 years and will produce around 608,000 ounces of gold, as well as 1.1 million ounces of silver.

Trans Siberian Gold was established in 2000, and aims to develop "a portfolio of quality gold mining assets in Russia".

South African gold miner Harmony is set to reduce exposure to its home market by pressing ahead with a new project in Papua New Guinea. Fresh from selling its stake in rival Gold Fields, the company now says it will commence production at its Hidden Valley project as early as 2008.

It estimates that the new mine will produce 285,000 ounces of gold a year over the next decade, boosting offshore production to around 20 per cent of Harmony's total by 2009.

Talking to Mining Weekly, the company's Papua New Guinea CEO Graham Briggs said Harmony would have a project execution plan ready by May.
Preparations for production have already been made, with a 25-km access road now halfway through construction.
Harmony raised 2.47 billion rand last November when it dumped its remaining 5.4 per cent stake in Gold Fields.
It currently carries out 90 per cent of its work in South Africa and is the world's fourth biggest gold producer.

The Indian National Mineral Development Corporation (NMDC) aims to spend Rs 6.5 crore on plans for a proposed gold mine in Tanzania.
The plan is to be drawn up by the state-run mining firm over the next 12 months, according to the Business Standard.
The Republic of Tanzania granted NMDC three prospecting licenses, covering the Bulyang'OMBE-i, Bulyang'OMBE-ii and Siga hills areas, in Iguna and Kahama districts.

The company has already spent Rs 2.5 crore on first phase exploration, according to NMDC chairman B Ramesh Kumar. This included drilling, surveying and mapping.

"In the next phase, which will see an investment of Rs 6.5 crore, a detailed project report will be prepared to assess its feasibility," he explained.
The initial studies showed that Bulyang'OMBE-i offered good prospects of gold concentration.
Meanwhile, NMDC is also expanding its operations into Namibia, Angola, Botswana and Algeria by prospecting for gold and diamonds.
The company is set to post a record turnover of more than Rs 3,000 crore by the end of the financial year.

Mineral exploration company Geologix has formed a strategic alliance with Newmont Peru SRL to explore an area of central Peru that has gold and silver potential. The area in question covers 7,200 square kilometres, and has already been explored by the two companies.

The alliance, to be managed by Geologix, will spend US$1 million this year on acquiring and exploring properties. Initially the focus will be on existing targets, and then the alliance will branch out into untested zones.

Although the companies listed above are only a fraction of what is happening in the gold world - the indications are that the big players are actively moving to replace dwindling gold reserves in traditional countries by developing operations in more remote locations in less well known gold bearing ground.

With the gold price expected to reach over US$600 per ounce sometime during 2006, gold is a serious investment opportunity.

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