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Gold sales to top LBMA agenda Posted: Mon, 26 Jun 2006 [miningmx.com] -- CENTRAL bank gold sales, the risks to mining companies seeking new gold supplies, and the heightened importance of silver are some of the topics likely to take centre stage at this year’s London Bullion Market Association (LBMA) annual meeting. Held in Switzerland, synonymous with its gold interest, LBMA 2006 is set to attract 350 delegates, most of them experts in their field. This is slightly higher than the Johannesburg attendance in 2005. Says Stewart Murray, LBMA chairman: “We’ve got a fantastic programme. More investors are attending which is not surprising.” Between now and the LBMA’s last annual meeting in Johannesburg, when the gold price nearly touched $500/oz, gold has pierced $700/oz only to retreat more than $100/oz. What appeared an inexorable bull market in November 2005 has become a difficult-to-call volatile market eight months later. That’s why there’s talk official sector sales may become headline-grabbing news in the next three months. According to the World Gold Council (WGC), the months from June to September could see a peak in central bank gold sales by signatories to the second Central Bank Agreement. The WGC said 209 tons of gold could be sold in the three months ended September compared to 291 tons in the previous nine months. At the last LBMA, the Russian Federation said it would double gold reserves to 10%. According to Murray, central bankers are not solidly represented among the presentations, but will be present in the audience. One central banker speaking at the LBMA will be Philippe Hildebrand, a member of the governing board of the Swiss National Bank. In his keynote address to the conference, he is likely to throw his weight behind gold’s insurance value during times of crisis. The short term fluctuations of gold in the short-term are likely to be pronounced, but they level off in the long-term, says Hildebrand. Pierre Lassonde, Newmont Mining Corporation president, will comment on the risk presented by having to find new sources of gold. His likely commentary that ongoing land access will require environmental and social leadership echoes earlier observations by AngloGold Ashanti CEO, Bobby Godsell, that fresh gold resources will be increasingly sourced from emerging markets. In 1995, there were just less than 14 separate gold discoveries of various ilks containing an estimated 110 million oz in gold resources. But by 2001, only two discoveries were made. The next three years showed fresh finds of between six to eight per year suggesting that fresh gold was available. But in 2005, at a time when freshly mined supply is well known to be falling, new discoveries totalled one containing less than 20 million oz. This must be concerning for the majors, particularly Barrick Gold which must find 8 million new ounces each year in just replacement production alone. Newmont Mining, AngloGold Ashanti and Gold Fields face similar pressures. Ben Cattaneo, practice leader of mining and metals at Control Risks, will also comment on managing risk in the supply side of the market. He is set to raise important questions such as legacy issues attached to certain projects, risk strategies (if any) of mining companies operating in emerging markets and whether companies have anti-corruption strategies.Free news alerts: click here to subscribe
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