The price of gold recovered overnight losses after the release of US Federal Reserve meeting notes in London trade Thursday morning, rising back to $1,375 as major stock markets also rose with commodities.
"[Mining] is not sustainable...where the gold price is at the moment," said Nick Holland, CEO of Gold Fields – the eighth largest gold miner in 2012 – yesterday. "We're going to need at least $1,500 an ounce to sustain this industry in any reasonable form."
The upside to gold stocks is that investors historically have received a 2-to-1 leverage by owning gold equities instead of the commodity. We believe that effective management can help miners gain more leverage over the metal for their shareholders.
Just when we need it the most the mining industry is starting to suffer a massive loss of accumulated wisdom, knowledge and field experience. This loss of experience, when combined with labor shortages, means future mineral output will be constrained.
Gold Fields would spend the next five years building up production at the South Deep mine to full capacity of 330,000 tons a month or 800,000 oz of gold a year, the head of South African operations Vishnu Pillay has said.