Thursday, 15th June 2006 (2971 views)

Major mining company Gold Fields' John Munro says the company is happy to be operating on a smaller scale than the world's largest two mining corporations, Barrick and Newmont, Mining Weekly reports.

The company's executive vice president for corporate development, John Munro told an analysts' open day that his company was pleased to be rated behind the big two because it gave much more scale for growth to ensure profitability.

Responding to the question, Mr Munro said: "There is very little growth available [at the top], particularly on the scale that Barrick and Newmont need it.

"We believe that there is an underlying market sentiment that these companies may have grown too big for a fairly constrained pull," he added.

Mr Munro illustrated his point with a graph showing the various companies' market ratings based on a price-to-net-asset-value multiple calculated from the price of gold and the corporation's overall value, which showed Newmont and Barrick at the flattening end of the curve.

"Being too big can be very tough," he continued. "Producers of ten million ounces a year need to bring an additional million ounces into production every single year.

"Companies of our size can fish for growth projects more successfully," Mr Munro concluded.

 

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