By Rob Starr, Content Manager, Big4.com
According to the latest PwC Gold Price Report , Gold is the favoured commodity of 2013 with more than 80% of gold executives and miners expecting to see a rise in the price of gold. Regarding development and exploration spending, 100% of senior gold companies used cash for such activities and they plan to do the same for the upcoming year. Meanwhile, 89% of mid-tier gold companies will use cash for project development and 83% will use cash to fund exploration activity in 2013.
As well, some senior gold miners may also use their cash for strategic M&A activity. Twenty per cent of senior gold companies plan to spend their money on acquisition related activities in 2013.
“Larger mining companies may be more watchful with their spending, but they haven’t forgotten about their exploration budgets. Expect increased exploration spending next year by senior and mid-tier miners, and well-funded juniors,” he says.
In the last few years, China has heavily invested in the African mining industry. “There are a number of examples of controlling investments by Chinese and Indian companies into gold, coal, and other commodity projects in Africa. Chinese investors come with significant financial support, facilitating the development of capital intensive mines,” concludes Gravelle.