Latin America's Gold Rush

New Report Underscores A Regional Success Story

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For immediate release: NEW YORK - Gold production is making a growing contribution to the economic development of many Latin American countries, and has the potential to make a much bigger contribution in future. These are among the findings of a report entitled The New El Dorado: The importance of gold mining to Latin America, published by the World Gold Council. It documents the results of the most comprehenmsive analysys yet undertaken of the economic importance of gold mining in Latin America. The countries of Latin America collectively produce 378 tonnes of gold - some 15 percent of the global total - with output having risen by 80 percent since 1990.

The new study is part of a continuing series published by the World Gold Council that examines the role of gold mining in the world's emerging economies. An earlier study, A Glittering Future?, examined the importance of gold production to Sub-Saharan Africa and demonstrated the negative impact on these countries of a lower gold price.

The New El Dorado indicates the lasting effects on Latin American production caused by the lower average dollar price in recent years but also points to the massive potential for gold production in many Latin American nations and the support that additional gold mining could give to their economies.

Other highlights in the report suggest:

• There is much potential for a sustained rise in gold output across the region, and gold production could make a growing contribution to their economic development.
• Growth in the region's gold output has been largely due to considerable foreign direct investment, bringing beneficial knock-on effects to the rest of the economy.
• If the recent growth momentum is to be maintained, then more exploration needs to be undertaken.
• While production costs in the region tend to be relatively lower than world figures, exploration projects could be jeopardized by a continuing low gold price.

The region's biggest success story is Peru - the world's 8th largest producer - where production now represents some 16 percent of total exports and cash costs are among the lowest in the world. Output has also risen particularly rapidly in Bolivia (10 percent of exports), in Guyana (nearly a quarter) and also in Argentina, Chile, Mexico, Uruguay, Nicaragua, Panama and French Guiana. Many of these countries have substantial potential for further rises in output if the price outlook does not deteriorate.

Commenting on the report, Haruko Fukuda, Chief Executive Officer of the World Gold Council said, "This research demonstrates once again the benefits gold mining can bring to many developing countries, in the form of increased government revenues, higher inward investment, direct and indirect employment and improved physical and human infrastructure. Gold's contribution to exports in Latin America is particularly helpful given the current account deficits many countries run on their balance of payments and the still high levels of debt service they are burdened with."

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Copies of the 66-page report are available free from the World Gold Council:
45 Pall Mall, London SW1Y 5JG (Tel 0207-930-5171)
444 Madison Ave., New York, NY 10022. (Tel: 212-684-6601 Fax: 212-725-4709).

The World Gold Council is an international organization formed and funded by leading gold mining companies from around the world to monitor and analyze developments in the gold market and to encourage demand for gold

For further information contact:
Gary Mead, World Gold Council - London Tel: (011 44207) 930-5171
Jill Leyland, World Gold Council - London Tel: (011 44207) 930-5171
George Milling-Stanley, World Gold Council - New York Tel: (212) 317-3848

Issued by:
Victor Webb, Marston Webb Int'l, New York Tel: (212) 684-6601
Keith Irons, Bankside, London