Gold to challenge $850/oz over next 18 months: Newmont

Lima (Platts)--3May2006

Gold prices will be "well over $600" per ounce this year and will go
higher over the next 18 months, even challenging the $850/oz level seen in
1980, Pierre Lassonde, president of Newmont Mining, said Wednesday.

"My current belief is that over the next 18 months [is that] we could see
higher gold prices," he said. "I believe that we are going to see the old
highs of $850 of 1980 challenged over the next 18 months," Lassonde told
reporters on the sidelines of opening ceremony of Peru's Seventh International
Gold Symposium.

He added that "the current cycle is very similar to what we saw in the
1970s, a very long extended cycle, and this one is powered by (economic
growth) in China and India." China will maintain a growth rate of 10%/year "at
least until after the Beijing Olympics. For the next two to two and a half
years we are going continue to enjoy unusually high prices. After that, it
remains to be seen," he said, adding that there could be a "hiccup" in
2009-2010.

Asked about a forecast for the average gold price for 2006, Lassonde
said: "It will be well over $600 [per ounce]." World gold production will be
about 80-81 million oz this year, which is down more than 5% compared with
three years ago, Lassonde said. As for production, he said, "We have not seen
the big discoveries that we saw in the 1980s and 1990s and for the few
discoveries that we have seen, the length of time to permit and develop these
deposits has lengthened from four years to seven years. In the next three to
four years, I do not see any production increase no matter what the gold price
will be," he added.

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