The board of directors of small gold producer St Andrew Goldfields (TSE) leaves no doubt as to how its members feel about the long-term outlook for gold: positive. “Massive deficits persist in the U.S. and appear to suggest the possibility of a coming credit crunch,” the board writes in a recent semi-annual report to shareholders.
“The gravity of the problem was presented in a recently published report which estimates that if the U.S. government pays an average of 8% on all its debt, its annual interest payments would amount to $250 billion, or a staggering $685 million per day.
“That would be equal to payments of $79,333 per second, which is the equivalent value of approximately 225 oz. gold.
“At that rate, just three days of U.S. government interest payments would consume one year’s supply of the western world’s gold production.”
St Andrew is hoping to turn out 27,000 oz. of the precious metal this year from its Stock Twp. mine near Timmins, Ont. The mine entered commercial production in October, 1989.
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