The state-owned gold mine, Rosario Dominicana SA, will not be able to take advantage of the latest increase in world gold prices due to its low production levels. The price of a Troy ounce on the London Metal Exchange has now exceeded US$410, and appears to be moving towards the US$420 mark. This is probably a direct result of an anticipated sharp fall in the price of crude oil once Iraq re-enters the market.
The daily production level at Rosario in Pueblo Viejo, the world’s largest open-pit gold mine, remains at a low of 289 troy ounces, which is under the 500 troy ounces needed for the company to reach profitability. Nonetheless, the company is currently moving ahead with the installation of machinery that will allow it to start strip mining operations in the gold-filled sulphur deposits. Studies conducted in the area reveal that the mine contains at least 10 million troy ounces of gold and 60 million of silver, making it one the world’s largest proven gold reserves.
A company spokesman gave his assurances that operations at the mine will not start until it is clearly established that they do not pose a major threat to the environment. According to the official, the environmental studies conducted by a U.N. technical commission indicate that the mine can be exploited, provided proper measures are implemented to protect the area against ground water contamination and acid rain.