Gold

Australia's largest gold miner, Newcrest Mining (ASX:NCM) has production down 25 percent due to an electrical system problem.

• Newcrest expects the plant to return to full capacity within 10 days.
• A company statement said, "Newcrest's maintenance team and the equipment manufacturer are addressing the issue and are working to have the plant ready for restart in the coming few days."

After a reported 16 percent dip in the March quarter, the country's largest gold producer, Newcrest Mining, (ASX:NCM), reduced its full-year guidance for gold production to approximately 2.82 million ounces, citing flooding at its Bonikro mine in the Ivory Coast.

South Australian mining company OZ Minerals (ASX:OZL) says it still anticipates to hit its full-year forecast target for gold despite a 23 percent production decline in the March quarter.

The company said, "While total gold production was lower this quarter, higher grades expected in the second and third quarters are expected to see production achieve forecast levels for the year of 185,000-plus oz of gold."

Dual listed, Australian Gold company, Andean Resources (ASX:AND) have seen its shares rise in both its listings on the Toronto stock exchange (TSE) and on the Australian share market. Canadian company, Goldcorp is seeking a takeover, offering $C3.6 billion for Andean Resources, or $C3.50 per share.

One of the largest Australia based gold miner Lihir Gold Limited (LGL) has finally endorsed the takeover bid of its rival Newcrest Mining (NCM), after the company raised the offer to $9.5 billion in an attempt to build the fourth largest listed gold mining company of the world. However, Lihir declared that it will continue to talk with the other bidders as well.

Oz Minerals (OZM) has released information that it expects gold production to increase over the period to 2012 while production costs expected to fall due to increased production. The company's shares jumped almost 4 percent on the announcement by Terry Burgess, the Chief Executive of OZM.

The company expects gold production to rise from previous guidance of between 80,000-90,000 ounces to 110,000-120,000 ounces a year. Copper guidance over the same period was unchanged at 100,000-110,000 tonnes a year.

Lihir Gold Limited (LGL), an Australia based company with concentration on gold mining, exploration and processing in the Australasian region was the best performer for this week in ASX100 with a gain of 33.7 percent or $1.02 to its stock price closing the week at $4.04.

Energy Resources of Australia (ERA), one of the primary producers of Uranium of the world was the worst performer of the ASX100 list for the 12th week of 2010. The company lost 5.9 percent or $1.20 to its stock price and was closed for the week at $18.90.

Australian Gold production is set to reach $10 billion in 2010 as output is increased at a time of historically high gold prices. In 2009, Australia produced 227 tonnes (or 7.3 million ounces) of Gold (increase of 3 percent on 2008). At current gold prices of $1250 for an ounce of Gold, the Australian gold output of 2009 would have fetched $9 billion. With the high gold prices, this precious metal is set to be Australia's third biggest export earner after iron ore and coking coal.

It is a bear season in the stockmarket and gold miners are prospering. The possible US recession is the most probable main driver. Gold is seen as the best hedge against both the US recession and the US dollar currency weakness. Gold has returned a neat 20 percent return compared to the S&P which has declined 12 percent. Market commentators relate the current action in the market to what happened during 1979-80, when gold prices trebled within a matter of few weeks. A Fed Reserve rate cut would surely propel gold to new high price levels.