Future uncertain as Mining Expo opens

Sandra Chereb

Thursday, June 17, 1999 | 11:18 a.m.

ELKO -- Experts from around the world gathered for the annual Mining Expo as the industry braces for an uncertain future fueled by the pending sale of gold reserves around the globe.

The 14th Annual Mining Expo kicked off Wednesday night with a dinner featuring Gov. Kenny Guinn. Other keynote speakers scheduled include Rob Giebel, vice president of P&H MinePro Services, Bruce Vincent, president of Alliance for America, and John Willson, chief executive of Placer Dome U.S. Inc.

About 450 exhibitors signed up for the expo, which officially opens today and runs through Saturday at the Elko Convention Center.

But while companies and vendors tout products and services, there's growing concern for the industry's immediate future amid plummeting gold prices that have hit a 20-year low and the threat of still lower prices on the horizon.

Gold closed Wednesday at $259.10 on the New York Mercantile Exchange, down $1 an ounce from Tuesday.

"I don't think we've seen the bottom yet," said a representative of a mining equipment manufacturer who asked not to be identified. "I hope I'm wrong."

Gold prices began their current slide on May 7 when Britain announced it would sell 415 metric tons of the precious metal from its reserve of 715 metric tons.

Swiss voters have also authorized the sale of treasury gold, and the International Monetary Fund is seeking members' approval to do the same.

A possible glut has mining industry officials wondering how low prices could go and gold producers searching for innovative ways to remain in business.

"That's the question of the hour," said Doug Hock, Newmont Mining Corp. spokesman in Denver. "It's our feeling the industry can't go on long term with these kind of prices."

Industry experts say companies in Nevada, the third largest gold producer in the world behind South Africa and Australia, are in the best position to weather the slump because they produce gold more efficiently.

Still, even efficiency has its limits.

"Our break-even mark has been about $275 an ounce," Hock said. "Obviously, that's not where the price is right now. We're still trying to cut costs."

Uncertainty is also taking a toll on employees, who are understandably concerned, said Mary Korpi, Newmont spokeswoman in Carlin.

"I think every person that works out there is aware of the gold prices," Korpi said. "But we don't want people to be consumed with that."

Instead, Korpi said Newmont has implemented programs to involve employees in developing cost-cutting measures.