Gold price crash will not hurt our plans, says Highland Gold

Wed Aug 7, 2013 4:39am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jemima Kelly

LONDON (Reuters) - Highland Gold (HGM.L: Quote), a Russian gold producer partly owned by oligarch Roman Abramovich, will not be swayed from plans to develop its new deposits by this year's crash in prices for the precious metal.

Eugene Shvidler, chairman of Highland Gold, said the company would buck the trend of other gold producers to rein in spending and put projects on hold because it had felt "no big impact so far" from the fall in gold prices by about a quarter this year.

But he expressed some frustration with smaller Russian gold companies reluctant to "marry" into partnerships after Highland tried and failed to forge deals over the last five years, warning them that this would hurt the industry.

"On the one hand (the price fall) is very scary, but on the other, it's very healthy," Shvidler said by telephone from his 200-hectare (500-acre) Château Thénac vineyard in southwestern France.

"There has been no big impact so far. If it stays the way it is, we're OK. We don't have to stop any big projects or anything like that."

The gold price started the year at just under $1,680 an ounce and was trading at around $1,280 early on Wednesday. Highland's 2012 all-in cash costs stood at $973 an ounce, the company said.

Shvidler, head of Abramovich's investment vehicle Millhouse LLC which owns a 32-percent stake in Highland, shrugged off comments by rival gold company, Russia's Polymetal POLYP.L.

Its chief executive, Vitaly Nesis, said last month the industry's response to the crash was "wholly inadequate" and spending cuts were "startlingly" slow.   Continued...

24 karat gold bars are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. REUTERS/Shannon Stapleton