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Section: Daily Dispatches

By Zachary Howard
Sunday, September 25, 2005

DENVER -- Gold companies will have much on their minds when they
present their corporate picture this week at the industry's big
show, the Denver Gold Forum, only days after bullion shot up to
command $475 an ounce for the first time in nearly 18 years.

The industry is contemplating not only the usual issues for gold,
such as price or demand or the dollar's direction, but also fresh
challenges to miners like replacing reserves and meeting what some
analysts are calling a "social license to operate."

At the 16th annual meeting, which starts on Sunday and runs through
Wednesday, 78 companies will make their cases to mining analysts on
the sell-side and more than 100 people on the buy-side in fund
management, said John Haigh, Denver Gold Group's executive director.

The mining companies attending have a total market capitalization of
$110 billion, or 99 percent of the gold industry as represented by
market cap, Haigh said.

In all, about 450 people are expected to show, up from 425 last year
and 400 in 2003.

Slated to give the keynote speech on Monday is Pierre Lassonde,
president of the world's largest gold producer, Newmont Mining Corp.

Victor Flores, a mining analyst at HSBC, said there would be much
discussion about the gold price at the meeting, as there always
is. "Obviously, it's going to have everybody excited. But how much
higher can it go after it broke to a new high?" he asked.

With investors buying up gold in recent weeks in a hunt for a haven
from inflationary pressures and uncertainty in currency and energy
markets, prices now stand a long way from lows near $250/oz. low
reached in the bear market of the 1990s.

Indeed, many producers are calling for gold to climb to historically
high levels within the next few years, helped by various economic

Ian Telfer, chief executive of mid-tier, low-cost Canadian producer
Goldcorp Inc., said last week gold could hit $500 by year's end and
$800 within one to two years.

"I think this price rise is a little bit different and it's going to
last for a while," Telfer said.

But David Rinehimer, director of commodities research at Citigroup
Global Markets in New York, said he wondered about the future of
demand in the gold market, especially with escalating prices.

"What kind are we going to see from both the fabrication side and
from investors at these price levels, because we're up over $40 in
less than a month?" he asked.

Other topics likely to be part of the buzz this year were cost
pressures for producers -- principally oil prices during a hectic
U.S. hurricane season -- and new project development, HSBC's Flores

On the "social license" issue, miners must comply with local
environmental, social and political standards, in order for their
projects to be well-received, he said.

Concerns about increased political risk have arisen after Venezuelan
President Hugo Chavez moved last week to tighten government control
of the mining industry by revoking concessions.

The nation's gold riches have drawn investment from foreign
companies such as U.S. Hecla Mining and Canada's Crystallex
International Corp., which is waiting for a permit to build a mine.

Some analysts wondered if this signaled an emerging trend in which
countries were becoming more nationalistic with respect to their
natural resources.

Meanwhile, Merrill Lynch said last week that at its recent mining
conference in Canada, a key focus of companies was reserve growth.

Increased exploration spending, rising production bases for some
companies and a continuing rise in cash costs also were some key
considerations, it added.

Merger and acquisition activity has been focused on development
projects and gold-producing mines, with the most popular targets
having at least 2 million ounces of reserves capable of an annual
output of 200,000/oz. of gold.


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Franklin Sanders
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