EDITORIAL Slowing Soviet gold sales

The gold price strengthened a bit during the past week, and there are indications that it could bounce back even more in the near future. Perhaps the most important single factor behind the price increase is a plan to extend more credit to the Soviet Union. At the group of seven industrialized countries’ economic summit in Houston, Tex., this month, Germany and France will be pushing for a US$20-billion credit package for Russia. If successful, it could reduce pressure on the Soviets to sell gold for hard currency.

That would be a step in the right direction, and not just for gold. Anything that can alleviate the immediate economic crisis facing the Soviet Union will bolster the position of President Mikhail Gorbachev and that, in turn, will permit the shift to a freer market economy to continue.006

Equity Silver Mines expects to close its open pit silver- copper-gold mine south of Houston, B.C., by the end of 1992. Out of the blue a provincial government official has said the company should post a $60-million bond for site reclamation after closure.

Equity Silver, however, has estimated it will have to pay about $30 million to reclaim the site in accordance with safety and environmental standards. We have no doubt that the company will meet its responsibilities, whatever the cost. It has already set aside $16 million for that purpose.

It could well be that the cost to the company will escalate to $60 million, although that seems like an exorbitant amount in light of the work involved and the millions of dollars the mine has already contributed to wages, services and taxes in the area since production began in 1981.

But there is an established process to determine the amount the company should put up, and that process includes discussions with the provincial government. Until that process is complete, there is no reason to believe it will cost any more than the company’s $30-million estimate. It could just as easily end up costing less.

Mining companies like Equity Silver are working hard to meet their responsibilities, but government officials who publicize unfounded estimates that could have a serious impact on investor confidence do little to further those efforts.

Let the process run its course before judging the outcome.