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The North America Precious Metals Sectors : A Company and Industry Analysis (January 2004)

  • ID: 656353
  • Report
  • January 2004
  • Region: America, North America, United States
  • 32 pages
  • Mergent
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Current Environment - Key Points
- As the dollar struggled near record lows against the euro in the middle of December 2003, gold hit its highest price in almost eight years
- Globally, world gold producers cut 156,000 kg (five million oz) of gold from their hedge books in the second quarter of 2003
This was the sharpest recorded fall in quarterly volume and represented a 28% contraction from the peak volume measured less than two years ago
- At the end of 2003, a heightened terrorism alert in the US prompted nervous investors to seek refuge in the yellow metal
- Demand for platinum group metals (PGM) from vehicle manufacturers soared in 2003, as the US, Europe and Japan tightened rules on exhaust emissions
- Encouraged by soaring gold prices, at least six companies in Canada are exploring significant gold deposits in the Northwest Territories and Nunavut
- Canada's largest mining company, Barrick Gold Corp (TSX: ABX) remains committed to reducing its hedge book for the primary purpose of improving its shareholder value

Industry Profile - Key Points
- In 2002, Mexico, Peru, Australia and the US were the top four silver-producing countries, with the US holding its fourth place despite a sharp drop in production
- Gold prices are fundamentally affected by industry and economic drivers
- The US dollar has an -inverse- affect on gold, which is priced in US dollars
- Platinum, unlike gold, has traditionally been traded according to underlying supply and demand fundamentals and has not attracted the same level of speculative trade that has characterized the gold market
- In the US, mining land reclamation is required by both state law and the federal Surface Mining Control and Reclamation Act (SMCRA)
- According to the World Gold Council (WGC), in September 1999, central banks held nearly a quarter of all the gold thought to be above ground (equivalent to around 33,000 metric tons)
Much of this was held by the central banks of Western Europe
- Canadian companies are leaders in tele-robotics and tele-remote mining techniques
Tele-remote mining enables underground vehicles and systems to be controlled from the surface
Market Trends and Outlook - Key Points
- The increased interest in fuel cells to power automobiles and for other uses is likely to increase demand for PGM
- Gold Fields Mineral Services- (GFMS) Third Quarter 2003 survey shows that on a nominal basis de-hedging continued in the third quarter of 2003
- The downward trend in exploration spending that has been apparent in almost every region of the world since 1997 has finally reversed, as all regions experienced an increase in exploration allocations in 2003
- Since late 1996 through the beginning of 2004, the most significant industry development has been the decline and recent rise in gold prices
- On October 9, 2003, the Canadian Government announced a $163.4 million investment that will capitalize on the use of hydrogen and fuel cells, and lead to cleaner air and a more sustainable economy in Canada
- The soaring price of gold is expected to encourage more mining companies in Canada to invest in gold exploration and mining

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Current Environment - US
- Sector Overview
- Sector Performance
- Key Players
Current Environment - Canada
- Sector Overview
- Sector Performance
- Key Players
Industry Profile - US
- Industry Size and Value
- Market Fundamentals
- Research and Development
- Policy and Regulatory
Industry Profile - Canada
- Industry Size and Value
- Research and Development
- Policy and Regulatory
- Mining Taxes
Market Trends & Outlook
- PGM: Growth of Fuel Cell
- De-Hedging Continues
- PGM Eyes New Records in
- Small Decline in Demand for
Photographic Silver
- Rise in China's Precious Metals
- Mergers and Acquisitions Still the
Way to Grow
- Upward Trend in Exploration
- Employment Prospects - US
- Market Outlook - US
- Canadian Upward Trend in
Exploration Spending
- PGM: Canada and Fuel Cell
- Employment Prospects - Canada
- Market Outlook - Canada
The Scope of this Report
Comparative Data
Key References
Sales Contacts

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Note: Product cover images may vary from those shown