Companies also signalled that merger and acquisition activity in the sector will continue, the group said in its 2010 Global Gold Price Survey Report.
Nearly 75% of gold mining companies expect the price of gold will continue to rise until the fourth quarter of 2011, with predictions for peak ranging from $1 400/oz and $3 000/oz when the survey was conducted in November, PwC said on Monday.
“Given the high demand for gold, it will be interesting to see if companies that have located marginal deposits of gold will kick-start their production and move faster than they would under normal circumstances,” PwC Canadian mining leader John Gravelle commented.
The survey found that 70% of gold producers plan to use their additional cash flow to look for new projects or expand existing ones to replace or replenish reserves.
The top three strategies were organic brownfield exploration (78%), organic greenfield exploration (54%), and mergers and acquisitions (37%).
“The number of mergers and acquisitions planned is in part explained by the correlation between the rising price of gold and the increase in deal activity,” Gravelle said. “This year has seen a surge of mining deals take place, which was also a notable trend in 1980 when the price of gold was its highest.” For the latest updates PRESS CTR + D or visit Stock Market news Today
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