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Wednesday, 7th June 2006 (3859 views)

Glamis Gold has cut its production estimates for 2006 from 670,000 to 620,000 ounces after mechanical problems at a Guatemalan site.

The company, however, is keen to point out that the lower figure still represents a 43 per cent increase on 2005 production.

The Marlin facility in Guatemala came with a merger with a Canadian company, but has seen mechanical failures and higher than expected clay content since production began in December 2005.

The news comes amidst a decline in the spot price of gold, something analysts such as John Hill from Citigroup see as a short-term correction.

"We have been positive on gold for three years and expect it to ratchet much, much higher over time," he said in a recent report.

"We would not be surprised to see a test of the old highs of $850 an ounce."

Glamis has been keen to stress that their problems have not resulted in any lost metal, only a delay in its production.

The spot price of gold had seen 12-month increases of $300 an ounce to over $720, but the past month has seen a $100 correction per ounce.

 

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