Double-dip ups gold investment outlook, PIGS's economic woes may boost gold, Blyvoor gold poised to come out of JM

A growing weight of investment money is poised to enter the gold market in the first half of 2010, according to the latest Gold Survey Update from international precious metals consultancy GFMS, whose chairperson, Philip Klapwijk, says that investor demand will be driven by fears of a double-dip recession, continuing huge government deficits, loose monetary policy and a belief that "notable, if not runaway, inflation is set to return".

Drawing together analyses from around the world, the survey predicts that gold prices will exceed $1 200/oz by the second quarter of 2010, compared with a 2009 average of $972/oz. "We sense that there is a large amount of money poised to enter the gold market in 2010," he says.

The economic woes of the economies of Portugal, Ireland, Greece and Spain (PIGS) could boost gold, says Randgold Resources CEO Dr Mark Bristow. Read on page 12 of this edition of Mining Weekly of the London-listed Randgold Resources reporting an outstanding set of record results, which saw the company's balance sheet remain strong at $590-million in cash with no net debt.

The African gold-miner's 2009 profit was up 79% year-on-year and its gold production rose 14%. Bristow says that the latest weakening of the PIGS economies is presenting new uncertainty, and "because politicians can't print gold, gold becomes a better store of wealth", he adds.

Randgold Resources is behind the big Kibali project in the Democratic Republic of Congo, which Bristow says may be as big as South Africa's Blyvooruitzicht (Blyvoor) gold mine in its heyday, with a throughput of 300 000 t/m and grades of 6 g/t. With that throughput, those who have worked at Blyvoor think Bristow may be erring on the side of understatement.

Meanwhile, JSE-listed DRDGold reports on page 14 of this edition of Mining Weekly that the now-mature Blyvoor is on track to emerge from judicial management (JM) by March, as the mine enters higher-grade areas and confidence grows in a stable gold price.

After Blyvoor went into JM in November, it obtained an R80-million drawdown facility in a deal in which gold aspirant Aurora, headed by Zondwa Mandela, acquired 60% of the mine. To watch a video in which DRDGold CEO Niël Pretorius tells Mining Weekly of Blyvoor's imminent emergence from JM, go to www.miningweekly.com and click on ‘Multimedia' and then on ‘Videoclips', or watch it on the Mining Weekly App on your iPhone.