MELBOURNE AUSTRALIA (Daily Reckoning): Rising gold prices have prompted Perth-based Centamin Egypt (ASX: CNT), an Australian gold exploration company with operations in Egypt, to proceed with its USD$216 million Sukari project. The area in which Sukari is located is believed to have first been mapped as a potential gold- producing region by King Seti 3,000 years ago.
The mine, which the company says will be Egypt's first modern gold producer, is expected to produce 200,000 ounces of gold annually for 15 years once it starts in 2008.
Barclays Capital has released the results of a survey which indicate that analysts believe a pick-up in demand from jewellery makers after weakness last year, as well as strong demand from central banks and a fundamentally weaker dollar, will lead to an increase in prices, according to a report from Reuters.
"From a fundamental perspective, fabrication (jewellery) demand has shown signs of stabilising following last year's sharp fall," Barclays Capital said in a research note. "Barring another surge in price and volatility, we expect demand to consolidate and firm up gradually over the year."
Gold fell yesterday, closing in Sydney at USD$671.30 per fine ounce. Amongst mining stocks Newmont (ASX: NEM) added three cents to AUD$5.88, Newcrest (ASX: NCM) rose eight cents at AUD$22.00, and Lihir (ASX: LHG) gained one cent to AUD$3.37.
The Australian reports that the world's third-largest mining company, Anglo American (LON: AAL), is expected to announce a share buyback plan returning up to USD$4 billion to shareholders, the result of a boom in metals prices. The company is now expected to look at mining acquisitions including operations in gold, platinum, iron ore, copper and diamonds.
Cambrian Mining (SEA: CBM) reports that early drilling results from its Costerfield gold and antimony project exceed expectations in both width and depth.
The company reports that this discovery has the potential to greatly improve the economics of the project by adding to the known mine life at Costerfield and by enabling the existing planned production rate of gold and antimony concentrates to be expanded.
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