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Barrick Bullish On Gold, Sees It Above $1,000/Oz

February 5, 2008 at 20:39 by Mario

Barrick Gold Corp. (ABX), the world’s largest gold producer, expects to see the price of the precious metal trade north of $1,000 an ounce, in part bolstered by a decline in global output, the company’s vice president of exploration said Tuesday.
Alexander Davidson said output across the industry is expected to decline by 10% over the next five years as a result of lower production from South African mines due to power shortages and safety concerns.
He said global production also is being knocked by the increasing length of time it takes companies to get permits to mine, longer ramp-up to production times in part due to skills shortages and higher capital costs.
Davidson, speaking to Dow Jones Newswires on the sidelines of the African Mining Indaba in Cape Town, said average industry cash costs are expected to be in the $500 to $600 an ounce range going forward.
“We’re certainly bullish on gold north of $1,000,” he said.
Davidson said the strength in the bullion price will also be driven by the continued “flight to safety” in investors’ portfolios and the possibility of central bank purchases of the metal.
Toronto-based Barrick has a portfolio of 27 operating mines that produced 8.64 million ounces of gold in 2006.
As of 1340 GMT, spot gold was trading at $889/oz, having hit a record high of $936.95/oz on Jan 30.

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