Kinross CEO Burt fires up gold investors in Denver

Tye Burt: “This is the good business. It is cyclical. The demand fundamentals are strong. The supply fundamentals have never been better for our metal.”

Author: Dorothy Kosich
Posted: Thursday , 11 Sep 2008

RENO, NV -

Kinross President and CEO Tye Burt Wednesday proved to be a beacon of reason and optimism piercing through the gloom of a Denver Gold Forum wallowing in the depths of despondency due to depressing metals prices and a lack of financing for junior mining projects.

In a good news/bad news pep talk, Burt exhorted analysts, institutional investors, and his mining peers "do not lose hope."

"This is the gold business. It is cyclical. The demand fundamentals are strong. The supply fundamentals have never been better for our metal."

"Not only are major mines in Peru, South Africa and the United States slowing. Not only are new mines not coming into production whether they're in Argentina, in Alaska, in Romania and in Venezuela. But it's never been tougher to permit, build and finance a new gold mine."

"Global mine production in gold has been in decline for the last nine or 10 years," Burt said. "We don't see that stopping any time soon."

"To me that's symptomatic of an industry that is going to be in severe supply constraint in the not too distant future," Burt declared.

While it may be hard "to explain the difference between Comex and physical demand today," Burt asserted that "it isn't hard to look into the future and see a world of dramatically constrained gold production and gold supply."

"That's the time to buy good stories," he declared. "That's the time to look at the discounts we see in our market today and say, ‘I can load up on a good story.'"

"It's not the time to climb into a foxhole today," Burt advised. "These are markets where risk takers are rewarded."

Kinross Gold is also proving to be a risk taker as it gambles on an upcoming election and a new mining law that will result in a favorable mining regime in an Ecuador where exploration was brought to a screeching halt only a few months ago.

With the pending acquisition of Canadian explorationist Aurelian Resources, Kinross will acquire the Fruta del Norte deposit, which Burt calls "one of the last, great gold deposits." Thus far, Fruta Norte has indicated an inferred resource of 13.7 million ounces of gold.

"We're quite excited about it," Burt declared. He is convinced that the current positive prevailing political atmosphere will ultimately result in a pro-mining regime in Ecuador.

Today's Angus Reid Global Monitor website says a Cedatos/Gallup poll has revealed that the number of people in Ecuador who support a new constitution "has dramatically increased in less than one month. ...55 percent of respondents would ratify the new charter in this month's referendum."

In his Denver Gold Forum speech, Burt noted that this past weekend Ecuador's President Rafael Correa said the country "need responsible mining." Burt anticipates that the new mining code could be taken up by Ecuador's Constituent Assembly after the September referendum.

Kinross hopes that the Fruta del Norte deposit will evolve into a "model asset for the country of Ecuador."