Changing Trends In The Exploration, Mining And Metallurgy For Gold In The 1990's

Scarcely a month goes by that I or someone else at Newmont Mining or Newmont Gold isn't asked to give a talk on the topic I was asked to discuss today. Investors, financial analysts, geologists, metallurgists, even our government--everybody wants to know what the future holds for gold mining. Well, you're not going to get exactly what you asked for. Today, I'm prepared to focus primarily not on what the future will bring to us, but rather on what the future will demand from us. More than that, I cannot undertake because it isn't within my scope to predict how wise and resourceful everyone in our industry will be in the future. What our future will hold, as I see it, will depend on our--and our colleagues'-- responses to these very real demands. Three critical issues stand out in my mind as to what the future will demand of us in the gold mining industry. And these demands will be for: 1. The very greatest of technical expertise and innovation. 2. The highest order of environmental sensitivity and timely accommodation. 3. Planning, planning and more planning. All of these flow inexorably today from the traditional objective of any mining company--or any company in any business, and that is, to make money. Nothing as I see it, should be undertaken by a geologist, metallurgist or even an environmental department, unless the exercises will enhance profits; and nothing may be ignored which can have consequent damage to the bottom line. Thus, the three issues I've listed for you subordinate themselves to the objective of making money, although at least in the environmental area, it might seem to some that we can only incur additional costs without even a dollar-for-dollar return. I hope to disabuse you today of any such out-of-date notion. Let's tackle the first issue-- Technical Expertise and Innovation. Newmont Gold Company this year is celebrating its 25th anniversary of successful and profitable operations on the Carlin Trend. Carlin in 1961, which is when exploration began on the "Trend" by Newmont, actually may share a lot of similarities with Carlin today. They didn't then know where the gold was and, if they found it, they had one hell of a challenge mining and processing ore at a profit because gold was selling at only $35 an ounce. Today, we know where the current reserves are. But we don't know where our future reserves lie. Furthermore, we don't know exactly how we're going to mine them, and, as everyone here knows too well, we don't know what the optimum metallurgical treatment is, even if we can find and mine them. And all that despite the abundant level of modern experience and skills within the current generation of mining companies, and the fact that, even taking inflation into account, gold sells at a higher price today than in 1965 when Carlin began operations. But, of course, I'm telling you what you already know.