High Gold Prices Encourage Miners to Reconsider More Difficult Projects

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Record-high gold prices encourage mining companies to dust off old projects, dig deeper underground and explore the most remote areas, participants at an international gold mining conference said on Tuesday.

Record-high gold prices encourage mining companies to dust off old projects, dig deeper underground and explore the most remote areas, participants at an international gold mining conference said on Tuesday.

Gold , seen as safe heaven investment during financial markets turbulence and a hedge against inflation and weak dollar, gained about 30 percent in 2007 and stormed new highs in 2008 hitting a lifetime high of $1,030.80 an ounce on March 17.

"We see a lot is companies going back to original projects ... There are some new projects, but mostly it's old projects that are being repackaged," said Randy Martin, Vice Chairman and Chief Executive of Colombia Goldfields mining company. Toronto-listed Colombia Goldfields took over a gold exploration project in Colombia which had been abandoned by previous owners when gold prices fell and plans to expand in the already existing gold mining area there.

Shortage of big new finds has forced precious metals mining firms, especially small ones, to sift through already discovered areas. That often means lower-grade ore and extra investments into drilling deeper underground, industry operators said.

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