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Gold exploration continues to fall.

  1. galloper

    1,380 Posts.

    Implications for the Gold market going forward is not hard to work out.

    In simple terms; reduced exploration, leads to reduced production, leads to greater shortage in relation to demand, results in a higher Gold price.

    This is not a cycle that can be reversed overnight!!

    Gold exploration continues to fall
    June 24, 2002
    AUSTRALIAN gold exploration expenditure has recorded another major drop, with ABS exploration data for the March quarter revealing a 12% decline on the December quarter to $73.9 million.

    Australian Gold Council chief executive Tamara Stevens described gold's fall as disappointing, but not unexpected given the venture capital and land access difficulties experienced by gold explorers in recent years.

    "Gold exploration expenditure has more than halved over the past five years, driven mainly by investor disinterest in the sector which has severely reduced gold explorers access to venture capital," she said.

    "The flow of capital into 'new' technology sectors such as IT, biotechnology and telecommunications in recent years has had a dramatic impact on gold exploration expenditure which, based on today's March quarter figure, has dropped 67% since its high of $225.9 million in June 1997."

    The council said the improved outlook for gold on the back of recent price highs, while welcome, would not be enough to address what has been a prolonged and substantial drop in gold exploration expenditure.

    "Although gold's recent rally has prompted a number of new and planned gold exploration floats, without more permanent taxation incentives to encourage long-term investor support of the gold industry's research and development arm, the industry's future remains uncertain," she said.

    "As lead times between exploration and mine development are generally between fouor and five years, a large and sustained jump in exploration expenditure is required now to address the ongoing fall in expenditure that has already led to ABARE forecasts of declining gold production over the next five years."

    "The council is pursuing implementation of gold exploration investment incentives with the federal government as a matter of urgency."

    Source: MiningNews.net

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