MercoPress. South Atlantic News Agency

Argentina gold production up 21% this year estimated to reach 2.05 million ounces

In times of uncertainty investors seek refuge in the precious metal

Argentina’s gold production will rise by about 21% in 2010 from a year earlier, Mining Secretary Jorge Mayoral announced in Buenos Aires.

Gold output will rise to about 2.05 million ounces this year from 1.7 million in 2009. Exploration and production are picking up this year following the global economic slowdown in 2009, said Mayoral.

“Drilling recovered after the slowdown in 2009 and there is an all-time record number of exploration projects in the nation” added Mayoral.

AngloGold Ashanti Ltd, Barrick Gold Corp and Xstrata Plc are among the miners producing gold in Argentina. Goldcorp Inc, the second-largest Canadian producer of the precious metal, this month offered to pay 3.5 billion US dollars for Andean Resources Ltd., an Australian-based gold miner whose primary exploration focused on the southern Argentine region of Patagonia.

Gold is the metal with best output growth perspectives in Argentina in the near term, Mayoral said. Silver production will rise to about 70 million ounces by 2017 from 25 million in 2009 as projects under review now come online, he said.

In world markets the gold price shot through a fresh all time high on Tuesday afternoon after loses earlier in the day. The precious metal shot back through the 1,300 US dollars mark to trade at 1,307.58 and closed at 1,306.09 an ounce.

This follows months of growth in the gold price as investors avoid choppy markets. At the beginning of August the price was yet to break the 1.200/ ounce barrier at 1.158/ounce.

In September 2009 the gold price was trading below the 1.000/ounce level at 990/ounce and in September 2008.

Arnold Wentzel - senior economics lecturer at the University of Johannesburg said that the current surge in the gold price is largely based on the current weakness of the US dollar.

“In times of uncertainty, investors usually look to the dollar or gold, and with the dollar at weak levels, gold is the obvious choice for the nervous investor,” he said.

Wentzel believes that at the current rate the metal’s price is growing, it could very well reach even higher levels in the coming months.

Barrick Gold, the world’s number one miner of the precious metal said on Monday that gold prices could “easily” outperform recent record highs to rise above 1.500 an ounce in the next year.