Barrick Gold suspends dev of massive pm mine

Well I think its pretty much unanimous that current spot price does not reflect real world supply/demand.

But this situation is unsustainable under current buying pressures. Eventually, when sanity returns, this project will reap rewards. In the meantime it's just good business management to mothball the project.
 
Seeking Alpha said:
For investors who are not familiar with this particular project, the Pascua-Lama project is located on the border of Chile and Argentina and is expected to be one of the largest precious metals mines in the world. It has an estimated 17.9 million ounces of gold reserves and 676 million ounces of silver reserves. The mine was expected to start production in the second half of 2014 and was expected to average gold production during the first five years of operation of 800,000 to 850,000 ounces and silver production of around 35 million ounces per year.
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According to the World Gold Council's Q2 2013 report, mine production in 2012 works out to around 92m/oz. 800,000oz is less than 1% of this figure, so I personally do not see a large impact from this one mine.

According to the Silver Institute's annual report in 2013, mine production in 2012 was around 787m/oz. On that figure, 35m/oz is slightly less than 5%, and this may - when the mine is in full production - have some effect on the price (though this assumes that we're in a "reasonable" market where things like supply and demand actually have an impact on price - I am not so sure that happens as much today).

EDIT: Just realised these figures were later in the article, but good to know they're accurately reported!
 
thing to remember is old mine supply is depleting while new supply is being curtailed at current prices. just depends on how well demand holds up and there's another thread that touches on that.
 
This is the beginning of the end........not the end.....of the pause in the bull run for gold.
Once we start to read of mid size producers falling, even large producers going to the wall, then we will be close to the time to strike.
I have noticed big movements in gold stock price for small movements downwards in gold price. It seems that there is little strength in gold stocks and as many producers are close to breaking even only, any large movement downwards in gold price will collapse prices. Once a gold mining company is not making money, they either go broke or if they have the capital, they mothball and wait.
No new mine developments will occur until the price enables a rapid return on assets. Perhaps 2 year repayment on the mine and then straight profit.
This is what is required to eventually release the bull. Shortages and supply restrictions with rising demand are the mechanisms behind any bull market.
Regardless what we read about the Chinese and Indians buying up all the worlds gold etc, etc.....there still seems to be plenty available at the mint. Even if they bought the lot, if no-one else wanted it then it is virtually worthless if you want to take it to the extreme.
This is a global market and the supply/demand picture does not add up to the bull run resumption just yet.....
It will take some more time, and a lot more bad news....but it is starting..
 
Golds market doesnt have a consumption model so mine production is largely irrelevant to the price trend.
And on top of that, there are the central banks, that buy high and sell low, punishing speculators that attempt the opposite haha.
 
tolly_67 said:
Shortages and supply restrictions with rising demand are the mechanisms behind any bull market.
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That's why we won't have a bull market for years perhaps. There are no shortages now and in the foreseeable future and there's actually surplus and this accounts in part for consolidated prices.



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