Monday, January 7, 2008

Gold was the big story of 2007 - - possibly 2008

There is one story that dominated the Timmins news in 2007 and by all indications it could be the big local story of 2008 as well.
The rising price of gold, which hit a 2007 peak of $841.10 U.S. on Nov. 8, has had a major impact on the economy of Timmins. Gold was trading as high as $872.50 U.S. an ounce in New York last week, an all time record high.Chris Cormier, the manager of Goldcorp Porcupine Gold Mines (PGM), says the rising gold price brought many mining projects back to life.
“I think overall is helped projects that would not have been feasible, or have remained feasible,” said Cormier.
“The biggest impact is that is has allowed for a lot of exploration dollars being spent locally,” he added.
The boom was evident early in 2007 as housing prices began to climb. By June, the results of a survey by RE/MAX Ontario, showed average housing prices in Timmins had risen by 29 per cent over a one year period.
Stan Makuch, the owner of Re/Max Millennium Inc. in Timmins attributed part of that to the confidence in gold as well as the growth of the De Beers diamond project in Attawapiskat.
In the meantime, Cormier says he is confident the economic upturn from gold is likely to continue.
“The exploration boom will continue as long as the price stays up and there are still companies out there canvassing for exploration dollars, so it will continue,” he said.
One of the major impacts was the decision by Goldcorp PGM to move its Hollinger project into the pre-feasibility stage to determine if there is enough gold mineralization to create a new billion-dollar open pit in the heart of the city.
Bob Calhoun, a geologist and manager of the Discover Abitibi Project with the Timmins Economic Development Corporation, confirms that gold has had the most positive effect on the local economy in the past year.
“This towns runs on gold,” said Calhoun. “If gold goes up everybody is happy and everything booms. But if it goes down they want to roll up the streets and leave town,” he added with a smile.
Calhoun says mining continues to be the engine that drives Timmins, but quickly adds that local copper, zinc and nickel mining operations are just as important as gold, but without the glamour.
“But everyone feels very good about themselves because of gold,” he said.
Cormier says the optimism over the gold price has a lot to do with it’s current price stability.
“I think generally no one had ever seen it this high for this long,” said Cormier.
Cormier adds there are many gold watchers who predict the price will go higher. He says there seems to be general agreement that the price could hit $1,000 U.S. an ounce within a year.

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