Wednesday is the final day of the Denver Gold Forum, with the 34th annual event wrapping up just as the US Federal Reserve raised interest rates by 75 basis points for a third straight time and signaled a more aggressive-than-expected path of hikes to come. Investors attending the Colorado gathering privately admit they feel depressed at the level where gold equities and prices are trading, though they also accept that the near-term outlook remains challenging in the face of a stronger dollar.<\/p>\n\n\n\n The knock-on effects from the Covid-19 pandemic and impacts of Russia\u2019s war in Ukraine are significant drivers of decades-high inflation, while a disrupted global supply chain has been adding to cost pressures for companies and consumers. Such issues are likely to linger as the Fed\u2019s continues its aggressive monetary tightening, according to top mining executives. <\/p>\n\n\n\n \u201cWe\u2019re in a very volatile economic environment at the moment,\u201d Newmont Corp.<\/a> CEO Tom Palmer said in an interview. \u201cLook out the window: you see inflation, interest rates increasing, you\u2019ve got the tragedy playing out in Ukraine. It\u2019s a theme that\u2019s broader than just the gold industry.\u201d<\/p>\n\n\n\n Palmer, who leads the world\u2019s largest gold miner, sees cost inflation in labor, fuel and energy, as well as materials and consumables \u201ccontinuing into the better part of 2023.\u201d<\/p>\n\n\n\n Rising costs are plaguing mining companies and their operations around the world. South Africa\u2019s Gold Fields Ltd.<\/a> has been dealing with high labor costs that are driving up expenses in Australia, where the company has nine operating mines, according to CEO Chris Griffith. While he has seen a cooling of fuel prices, other components key to mining, including explosives and reagents, haven\u2019t come down yet thanks to persistent inflation.<\/p>\n\n\n\n \u201cWe\u2019ll likely still see inflation at high levels for a significant period of time, although we\u2019ve seen it flattening off,\u201d Griffith said in an interview.<\/p>\n\n\n\n The Fed has been pursuing aggressive monetary tightening to bring down inflation, which has lifted bond yields and the dollar. Central banks around the world are pursuing similar hawkish measures. Such actions could make it challenging for single-asset producers and development companies that may not have the financing means to absorb costs and increase capital, according to Shaun Usmar, CEO of Triple Flag Precious Metals Corp<\/a>. <\/p>\n\n\n\n \u201cThose companies have seen stock prices come down a lot,\u201d Usmar said in an interview. \u201cThe equity markets probably aren\u2019t accessible — if they are, it\u2019s very expensive, very dilutive. Debt, if they can get it, is very expensive and is getting more expensive at the moment.\u201d<\/p>\n\n\n\n Such an environment leaves room for mergers and consolidation, especially for miners with cash and a need to grow, said Usmar, who served as Barrick\u2019s chief financial officer from 2014 to 2016.<\/p>\n\n\n\n \u201cThe best risk mitigator for any mining company is liquidity,\u201d he said.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" The world\u2019s top gold mining executives see cost pressures sticking around into next year, adding to industry headwinds fueled by economic and political uncertainty, supply-chain disruptions and surging interest rates. Those gathering at the Denver Gold Forum this week shared a collective view that the current economic environment is unprecedented. Gold producers are grappling with […]<\/p>\n","protected":false},"author":1,"featured_media":139,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-76","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-issues"],"_links":{"self":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/76","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=76"}],"version-history":[{"count":1,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/76\/revisions"}],"predecessor-version":[{"id":77,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/posts\/76\/revisions\/77"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=\/wp\/v2\/media\/139"}],"wp:attachment":[{"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=76"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=76"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dhcab.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=76"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Top](\"https:\/\/assets.bwbx.io\/images\/users\/iqjWHBFdfxIU\/iM3PHBKi_mcU\/v2\/pidjEfPlU1QWZop3vfGKsrX.ke8XuWirGYh1PKgEw44kE\/620x-1.png\")
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