Small is beautiful as gold hits a crunch February 11, 2008
WHILE disappointing, the news that View Resources had called in the administrators was not the big gold story of the week - although it would have been for Lion Selection Group, which had invested $7.9 million and, at the most recent substantial holder notice, held 31 million shares, or 7.1 per cent, of View.
The $10.6 million raising in November and the sale of View's stake in the Carnilya Hill nickel project for $25 million might have given ground for thinking the company could have kept its head above water at the Bronzewing gold mine. Traders clearly thought so as they heaved View's share price off the floor in mid-January.
No, the big gold story of the week came from Newmont Mining. The global miner said it was boosting its exploration budget. And they will target smaller deposits as part of the campaign.
Not to get too carried away, but this switch is an epochal event. For years, the majors have been walking away from discoveries because they did not meet size requirements; a resource of 500,000oz of gold was just not befitting a world player. And they sold off the scraps, as Barrick Gold did by flogging its Paddington mine to Norton Gold Fields.
Newmont has historically mined deposits greater than 10 million ounces - but these are getting scarce on the ground at the moment. Now they have to consider more humble targets, a sign of how gold supply is going to face further crunches.
