Roughly 1,800 people attended the Northwest Mining Associations annual convention here this month and there wasnt an unhappy face in the joint, says Laura Skaer, the groups executive director.
It was very, very upbeat, Skaer says. Prices are up and are expected to stay up next year.
Gold has been selling for about $790 a troy ounce recently, compared with $630 an ounce at this time last year and $525 in late 2005. Silver is selling for about $14 an ounce, up modestly from a year ago, but markedly higher than in late 2005. Other metals prices also remain strong.
Demand for metals continues to grow, due in part to the fast-developing economies of China and India, says Vicki Veltkamp, the mining associations current president and vice president for investor relations at Coeur dAlene-based Hecla Mining Co. The supply side, meanwhile, hasnt changed that much, Veltkamp says, adding that it takes years to bring new production on line.
The mining industry has been rejuvenated by the increase in metals prices overall, she says. Theres increased activity. A lot of excitement.
One issue that has mining executives worried, however, is the effort in Congress to reform the 135-year-old federal mining law. The U.S. House passed its version for reform in November, but the industry doesnt like the measure. Skaer says word on Capitol Hill is that the Senate version will be far more palatable to mining companies. Its not clear yet, when or whether the two chambers will be able to compromise on a final reform bill, she says.
Skaer says mining companies continue to struggle to open new mines, due to challenges by environmental groups and strict permitting rules, and while many have focused new development outside the U.S., there are challenges there as well.
Everyone is just trying to balance the political risk of a permitting process that never seems to end (in the U.S.) against the dictator thats going to confiscate all your assets (abroad), Skaer says.
North Idahos Silver Valley is one place in the U.S. thats getting increased attention in the industry. Heclas Lucky Friday unit, which now employs about 260 people, is prospering, again and the company is working on two pre-feasibility studies that could lead to a large expansion. Also, Wallace-based Sterling Mining Co. expects to reopen the venerable Sunshine Mine by the end of this year, and to employ 200 people there a year from now, says Monique Hayes, Sterlings investor relations manager.
Were certainly feeling very positive about the future, Hayes says.
Meanwhile, Coeur dAlene Mines Corp. said last week that its shareholders have approved its plan to acquire Palmarejo Silver & Gold Corp., of Longueuil, Quebec, and Bolnisi Gold NL, of Sydney, Australia, in a $1.1 billion transaction. The acquisition will give Coeur the big Palmarejo silver and gold project in Mexico, which eventually is expected to help boost Coeurs silver production to nearly 30 million ounces, more than double current volume.
Coeur continues to try to resolve environmental concerns at its planned Kensington gold project in Alaska, where construction is completed but litigation surrounding its tailings plans remains. The mine is expected to produce 150,000 ounces of gold a year. The companys San Bartolome silver mine in Bolivia is slated to begin production in February.