Deja vu for gold miners at annual Denver forum
Reuters, Friday September 5 2008
By Frank Tang
NEW YORK, Sept 5 (Reuters) - It's like deja vu for the top mining executives who will present their corporate pictures next week at the Denver Gold Forum, an annual industry get-together.
Just like last year, top mining executives are still grappling with the touchy issues of renewing reserves, controlling costs and struggling to put projects into production.
However, momentum in the gold market is much more bearish now as bullion was flying during last year's conference, and combined with cost inflation, lower prices will make headlines for sure during the forum.
"Gold prices are not high enough to give them the profit margin to get a return in capital because all the cost for mining: engineers, higher rubber, electricity, etc. is too high relative to the price of gold being too low," said Frank Holmes, chief executive of U.S. Global Investors.
The presenters at the forum, which starts on Sunday and runs through Wednesday, will include industry leaders Barrick Gold , Newmont Mining , Freeport-McMoran Copper & Gold and AngloGold Ashanti .
A total of 86 mining companies, up from 72 last year, will make their cases to mining analysts on the sell side and buy-side fund managers with more than $3 trillion in funds under management, said Denver Gold Group, the organizer.
Holmes, whose firm manages $5.5 billion in mutual fund assets, said that reserves replacement and improvement in executing mine projects would be among the hot topics during the forum.
"So the (question) is: How do Newmont and Barrick replace their production year after year? 
And a lot of juniors have failed to find enough resources to become attractive," Holmes said.
Holmes estimated that fewer than 30 major pure gold producers were producing more than 100,000 ounces of gold a year, which is a tiny fraction of global gold demand.
"The lead time to bring the big projects into production gets longer and longer, and they are just not finding enough new gold deposits as they've had in the past," said Joseph Foster, portfolio manager of Van Eck International Investors Gold Fund, which had $784 million fund assets as of June 30.
Foster said that fierce opposition from anti-mining groups, environmentalists and local population often slowed production at gold mines. He forecast that gold production would continue to remain stagnant for the next five to six years.
A SHOT AT RECOVERY
Spot gold traded at $818.30/819.20 an ounce on Friday, sharply below its all-time high of $1,030.80 set on March 17 and a secondary peak of $987.75 on July 15.
A sudden resurgence of the dollar appears to put a damper on the commodity boom.
However, soaring oil prices, albeit a retreat from record high, have hurt the bottom line of most gold miners in the second quarter, analysts said.
Not surprisingly, gold mining shares, which are supposed to shine amid a bear stock market, have taken a beating recently.
The closely watched AMEX Gold Miners index <.GDM> is trading at nearly the same levels as a year ago, after the index rallied to record in March, moving in tandem with gold prices.
John Hill, director of metals research at Citi, said that gold was punished amid a broad-based correction in commodities, partly due to a sharp drop in jewelry buying -- a pattern reminiscent of 2006 when India's gold bullion import collapsed as price soared.
However, Hill said that he expected gold fabrication demand could roar back in the second half of this year, following a similar pattern in 2006 when prices began to drop sharply after its peak in May.
"Longer term, we would not be surprised to see gold double from current levels," he said.
Fund managers said that the entire gold mining sector is now undervalued and looks attractive to buy, but Van Eck's Foster said that he particularly likes companies that can show promising growth prospects.
However, U.S. Global Investors' Holmes said that some mining companies fail to produce what they keep forecasting and that honesty is a factor in picking a company.
"It's like buying a lottery ticket of what they are going to produce and what their issues are. It's a continuous negative surprise," Holmes said.
(Editing by Marguerita Choy)
Ps...So eine S..e, ich haette bei HUI 500 alles in physischen investieren sollen dann koennten mich diese PM Aktien am A vorbei gehen. 
Die Juniors finden nix, verbrennen nur ihr Cash, mein Cash, Euer Cash und stehen um ein Loch im Boden mit einen Bier in der Hand und besprechen das naechste PP. 
Das PPT hat mittlerweile Gold verliehen fuer die naechsten 12 Jahre was noch im Boden ist.
Weniger Produktion, geringer die Gewinne der Produzierer bei den Spots, 1999 - 2002 here we come again.
Die Reden schon von 700 USD Produktionskosten, Hurrah 10-15% Gewinn !
Goldfields braucht 2000 USD um profitable zu sein, was haben wir ?
805 lumpige USD fuer eine Unze Gold, POS 12.20 $.
Fck, haette, wenn, hilft mir aber nichts, Klopapier bis jetzt diese PM Minen allesamt.
Gleich eine Valium, nicht zu fassen das ganze. minus 50-70 % Kellergeisterminen, kein Schwein will sie, so schauts doch aus. 
can be won for shareholders. 
..der Mann untersucht alles bis in den Grund und Boden.
.
