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Gold Producers Are Mildly Optimistic That the Price of Gold Will Make a Modest Comeback in 2014

Date: 12/10/2013
Source: PwC
After a very poor performance in 2012 and 2013, when the price of gold plummeted from the peak reached in 2011 of $1,900 per ounce to around $1,200, gold producers are mildly optimistic that the price of the yellow metal will make a modest comeback next year. 47% of gold producers expect the price to increase in the next 12 months, compared to 88% a year ago, according to PwC’s new Gold, silver and copper price report.

The worst performing metal this year was silver – with prices plummeting 40%. But silver miners are optimistic for 2014 with only 9% anticipating the price of silver to fall further next year.

Copper prices fell too, from $3.70 per pound at the start of the year to around $3 currently, but are expected to be stable in 2014 with nearly two-thirds of respondents (62%) predicting copper prices to remain around current levels.

“While 2013 has been a tough year for miners, the industry has faith that fundamentals will recover.
Gold, silver and copper may not reach record levels in the near future, but expect prices to increase alongside a stabilising global economy”, stated John Webster, Partner, Assurance Leader, PwC Romania.

Managing costs and finding financing are among the top priorities for miners amid less optimistic future price expectations. According to the report:
• Two-thirds (66%) of mining companies cite managing their spending as one of the most important business imperatives in 2014
• More than half (54%) of miners say raising financing is critical
• One in five (20%) of respondents highlight mergers and acquisitions as something they plan to pursue

For the coming year, 53% of miners said they anticipate going to the equity markets to raise capital, while 29% expect to raise project financing, and another 14% plan to raise corporate debt.

“After years of spending on mergers and acquisitions and expanding operations with money generated from high metal prices, miners are now cutting back. Encouraging investors to return to the mining space will involve strict cost management strategies and responsible investment in production growth.
China’s economic growth is expected to remain strong as it executes its reform agenda – providing hope for mining companies that continue to sell their commodities to the world’s second largest economy. The gradual economic recovery in the US should also help increase long-term demand for commodities”, added John Webster.

About the survey
Annually, PwC surveys gold mining companies globally. This year, the firm included copper and silver companies from a cross-section of the more than 100 senior, mid-tier and junior companies. All figures are in US dollars. For more information on PwC’s Gold, silver and copper price report 2014, please visit PwC’s mining site at http://www.pwc.com/ca/en/mining/global-gold-price-survey-results.jhtml.

About PwC

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/ro

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2013 PwC. All rights reserved.

old Producers Are Mildly Optimistic That the Price of Gold Will Make a Modest Comeback in 2014



Bucharest, 10 December 2013 – After a very poor performance in 2012 and 2013, when the price of gold plummeted from the peak reached in 2011 of $1,900 per ounce to around $1,200, gold producers are mildly optimistic that the price of the yellow metal will make a modest comeback next year. 47% of gold producers expect the price to increase in the next 12 months, compared to 88% a year ago, according to PwC’s new Gold, silver and copper price report.

The worst performing metal this year was silver – with prices plummeting 40%. But silver miners are optimistic for 2014 with only 9% anticipating the price of silver to fall further next year.

Copper prices fell too, from $3.70 per pound at the start of the year to around $3 currently, but are expected to be stable in 2014 with nearly two-thirds of respondents (62%) predicting copper prices to remain around current levels.

“While 2013 has been a tough year for miners, the industry has faith that fundamentals will recover.
Gold, silver and copper may not reach record levels in the near future, but expect prices to increase alongside a stabilising global economy”, stated John Webster, Partner, Assurance Leader, PwC Romania.

Managing costs and finding financing are among the top priorities for miners amid less optimistic future price expectations. According to the report:
• Two-thirds (66%) of mining companies cite managing their spending as one of the most important business imperatives in 2014
• More than half (54%) of miners say raising financing is critical
• One in five (20%) of respondents highlight mergers and acquisitions as something they plan to pursue

For the coming year, 53% of miners said they anticipate going to the equity markets to raise capital, while 29% expect to raise project financing, and another 14% plan to raise corporate debt.

“After years of spending on mergers and acquisitions and expanding operations with money generated from high metal prices, miners are now cutting back. Encouraging investors to return to the mining space will involve strict cost management strategies and responsible investment in production growth.
China’s economic growth is expected to remain strong as it executes its reform agenda – providing hope for mining companies that continue to sell their commodities to the world’s second largest economy. The gradual economic recovery in the US should also help increase long-term demand for commodities”, added John Webster.

About the survey
Annually, PwC surveys gold mining companies globally. This year, the firm included copper and silver companies from a cross-section of the more than 100 senior, mid-tier and junior companies. All figures are in US dollars. For more information on PwC’s Gold, silver and copper price report 2014, please visit PwC’s mining site at http://www.pwc.com/ca/en/mining/global-gold-price-survey-results.jhtml.

About PwC

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/ro

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2013 PwC. All rights reserved.

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