Agnico Eagle CEO: There Won’t Be A ‘Substantial’ Number of New Gold Mines Built

The comments below are an edited and abridged synopsis of an article by Kevin Stankiewicz

While demand for gold remains strong, building mines has grown more difficult over the last decade, Sean Boyd, the CEO of Agnico Eagle, told CNBC’s Jim Cramer.

Agnico Eagle CEO: There Won’t Be A ‘Substantial’ Number of New Gold Mines Built | BullionBuzz
Long conveyor belt at mine

“It’s a lot tougher now than it was 10 or 15 years ago,” Boyd said.

Several factors contribute to the increasing difficulty, including the geographic realities of opportune locations.

“The deposits that are being found now… are found in parts of the world which lack infrastructure, are in parts of the world which countries may not want you there,” Boyd said. “That’s why it’s also getting more challenging to find deposits.”

Even if those challenges are met, there are more hurdles, Boyd explained, citing permitting issues associated with tougher environmental regulations.

“That’s another thing which limits supply. The lead time to build these assets [is] a lot longer, the capital required to build them a lot larger,” he said. “That just makes it more difficult.”

Nevertheless, demand for gold is strong.

“Still very strong demand coming out of central banks, coming out of regions like China and India,” said Boyd. “It’s getting much tougher to grow reserves. It’s getting much tougher to grow production, not just grow production but grow it in a way that actually improves the underlying quality of the business.”

Even so, “I think that bodes well—even if gold is at $2,000, we’re not going to see a substantial amount of new mine supply because it’s just so difficult,” he said.

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