Lol, don't slit your wrists if you are holding Gold producer shares.
Gold Council hails price jump September 20, 2005 - 2:59PM
A leading industry group has warned that while the surge in the gold price is good news for existing Australian miners, declining domestic exploration could limit the nation's capacity to meet increasing demand.
Australian Gold Council chief executive Michael O'Neill said with the current price of gold past the $US465 per ounce mark, miners will become increasingly attractive to investors and create a investment environment.
But he said the Australian industry was limited in its capacity to benefit from the surge because of a decline in exploration activity.
"We have seen over the last five years Australia decline from being the second most active region for exploration to now the fifth," Mr O'Neill said.
"Globally we have fallen off the pace as far as exploration is concerned.
"An inability to attract the necessary investment for exploration and a failure as a nation to invest adequately in the necessary research and geoscience data were key considerations.
The capital issue in particular is a market failure and we will reap the consequences with this missed opportunity."
US gold futures hit a fresh 17-year high on inflation concerns and a new storm brewing in the US Gulf of Mexico
Gold for December delivery on COMEX ended Monday up $US7.10 per ounce at $US470.40.
Mr O'Neill said that industry has proposed for some time the adoption of a flow through share initiative that has proved a boon for exploration in Canada.
"Under a Flow Through Share initiative, eligible tax-deductible expenses are transferred from companies to individual investors reducing investor exposure associated with investment in high risk exploration," he said.
"A range of conditions and eligibility criteria apply to the operation of such an arrangement."
