Malcolm Norris, CEO of Solomon Gold, believes gold will go higher that the two-week high that was reported yesterday. He credits this to the loose monetary policies in the United States and the continued anxiety in Europe. He also continues to be optimistic that the price of the metal will hit $2,000/oz this year.
By: Madeline Laskoski
Published: Wednesday, 28 Mar 2012
The price of gold hit a two-week high and posted its biggest one-day rise since January after Federal Reserve Chairman Ben Bernanke boosted expectations of prolonged, low interest rates. Malcolm Norris, CEO of Australia-based miner and explorer Solomon Gold, says the precious metal could go even higher.
"If you look at loose monetary policy coming out of the U.S., if you look at continued anxiety out of Europe, then it is logical for people to invest in gold," Norris told CNBC. "Where else are they going to invest their money in a high risk environment?"
When asked if gold [XAU= 1663.90 -16.14 (-0.96%) ] could hit $2,000 an ounce this year, Norris said: "While it continues to be a logical choice, then the price will go up."
However, the current price of gold is only half of the equation. Norris stressed that Solomon Gold must look to the cost of production for future growth and stability.
Solomon Gold [S8F-FF 0.085 -0.001 (-1.16%) ] currently has major projects underway in the Solomon Islands and Queensland, Australia. Rannes, a branch of Queensland, is predicted to be a current hot spot for gold. Norris is focused on further exploring the resources in Rannes in hope of finding ways to bring down the cost of extraction.
"We’ll be looking at how that gold is extracted. If we can extract it via a heat bleach process, then maybe our capital costs are much lower," Norris said.
Solomon Gold started serious mineral capitalization ventures when it hired the discovery team, Intrepid Mines [SOLG-GB 7.875 -0.25 (-3.08%) ]. "The increase in value over the period of about two years was from $40 million to $1.1 billion in market capitalization terms," Norris said as he commented on the immediate success that Solomon Gold saw after teaming with Intrepid Mines.
Norris emphasized that mineral capitalization is critical to adding value. However, it is a long and costly process.
"It will probably be a two-year exercise. These things cost money and take a lot of time," Norris said. "We’ll need to have another financing round to get to that stage and as we can demonstrate good results over time, then that should be reflected in improving share price."
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