Newmont Mining CEO Sees Gold at $1,750 in 2012
Newmont Mining Chief Executive Richard O'Brien said gold will rise to $1,750 an ounce in 2012 due to inflationary pressures and continued uncertainty in U.S. and European economies.
"I think we’ll continue to see pressure on gold prices for many years to come," he told CNBC Friday. For the mining company "it is a boon for our business." O'Brien had previously expected gold's price would reach $1,600.
O'Brien said he is surprised Newmont's stock is down, especially after the company announced its gold-price-based third-quarter dividend will be raised to 30 cents per share from 20 cents a share. The company's board also approved two new gold and silver projects in Peru and Australia.
Friday, the company announced second-quarter earnings that, while higher, missed Wall Street expectations.
"This is a cyclical business we are in, for sure, not just with respect to pricing but mine cyclicality," O'Brien said. "What you saw in the quarter is we didn’t mine as much copper as a year ago…and we had a little higher costs in our operations in Nevada. But the last half of the year, we’ll make all that up."