Barrick exploration head says easy gold has all been found

Vancouver – Life in the gold exploration sector is not getting any easier, especially for major mining companies who are seeking growth.

The warning comes from Alex Davidson, executive vice-president of exploration and corporate development at Toronto-based Barrick Gold (ABX-T, ABX-N), the world’s leading gold producer.

Speaking to the Roundup 07 conference in Vancouver, Mr. Davidson said the easy gold deposits have already been found, meaning that the industry will increasingly have to look for new discoveries in the more remote areas of the world.

“Exploration is maturing at least in the areas of the world where we have traditionally pursued opportunities because they had a long history of big deposits,” he said.

As a result, exploration work will become logistically more difficult, requiring mining companies to take on more political risk at ever increasing cost, Davidson said.

“This lack of new large scale discoveries, and thus new projects, will continue to hamper growth for some time,” he said.

Davidson said the impact of these challenges is showing up in the form of recent downward revisions in industry gold production targets, and stagnant growth worldwide.

World gold production for 2006 is forecast at 2,567 tonnes, a 2.2% decrease from 2005, Davidson said, adding that 2007 is projected to be about the same as 2005, based on advertised numbers.

“But it may actually fall and continue to fall as we go forwardgiven the age of producing mines and the challenges associated with new discoveries and new developments,” he said.

Meanwhile, Barrick expects to spend about $175 million on exploration this year, money that will be directly primarily to its existing operations.

It means the company will be looking in areas such as Nevada, Chile, Argentina, Peru, Tanzania, and Papua New Guinea.