Gold prices perked up through 2002 and spiked sharply
with an unsettled world situation in the final weeks of the
year.
That won't necessarily translate, however, into big
improvements for the Nevada gold mining industry during
2003.
Rather, the year is likely to be one that's noteworthy for
an upsurge in the exploration that lays the groundwork for
the industry's future growth.
"The industry is cautiously optimistic about '03," said
Russ Fields, president of the Nevada Mining Association.
As gold prices stayed above $300 an ounce this year
compared with an average of $271 in 2001, major players in
the industry were encouraged to continue with long-term
development projects.
Newmont Mining, for instance, pushed ahead with two
major projects that won't come on line immediately.
The Denver-based company began construction of its
Leeville mine in the Carlin Trend, a mine that is expected
to begin production in 2006. The company projects the
mine will produce 450,000 to 500,000 ounces a year for at
least seven years.
Newmont also began pre-stripping the expansion of its
Gold Quarry mine, also in the Carlin Trend, in anticipation
of beginning production in 2004.
"Mining is a long-term kind of business," said Newmont
spokesman Doug Hock. "We continue to feel confident
about Nevada."
While new mines are landmarks in the industry's development,
the exploration for new resources during 2003 will
be equally important.
Fields said improving prices in 2003 have begun to draw
investment dollars into the industry, dollars that often flow
to smaller companies that actively prospect for new gold
deposits.
Big companies, too, are on the trail of new deposits.
Newmont expects to spend $16 million on exploration in
Nevada next year, a figure comparable to its spending this
year.
While the state's mineral production ranges from limestone
and aggregates to copper and silver, much of the
attention focuses on gold for a simple reason it accounts
for about 90 percent of Nevada's mining output.
"Gold is the name of the game," said Fields.
In 2001, the state's mineral production totaled $2.5 billion,
and gold accounted for $2.22 billion of that total.
Nevada's mines, which have been producing more than 8
million ounces of gold a year since the late 1990s, rank the
state tops in the United States in mineral production.
In fact, if Nevada were a separate nation, its gold production
would rank behind only South Africa and
Australia.
At the same time, however, the industry's employment
has been slowly drifting downward in recent years. Few
new mines came into production as gold prices remained
below $300, and mining companies cut costs to boost margins
when prices remained stagnant.
"It's been hard," Fields acknowledged as he noted that
employment in the Nevada mining industry has fallen to
about 10,000 today from approximately 15,000 as recently
as the mid-1990s.
While the industry's employment makes up a modest
portion of the state's workforce, many of its jobs are located
in rural communities where even a half dozen good-paying
positions can make a significant difference.
But it's not just gold deposits within the state that provide
mining-related jobs in Nevada. Northern Nevada
companies search for gold around the world.
Reno-based Meridian Gold, for instance, expects to start
up its Esquel mine in Argentina during the first quarter of
2003, with the first gold from the mine poured in the first
half of 2004. That mine is estimated to produce 300,000
ounces of gold a year.
Glamis Gold, another Reno-based company, plans to
begin work this year on its El Sauzal project in Mexico.
That mine is projected to produce 190,000 ounces of gold a
year.
