Better pricing brings life to mining industry

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.