Metals continue to shine

If 2007 lives up to expectations as a year of political unrest and world strife, prices for gold and silver could rise substantially – boosting the paychecks of Silver Valley miners and benefiting local mining companies.

“There are a tremendous number of problems that could scare investors into gold and silver,” said Jeffrey Christian, managing director of the New York-based CPM Group. Investors tend to flock to gold and silver during times of uncertainty, seeking a storehouse of value for their wealth. Increased investor interest pushes prices up.

With the U.S. at war in Iraq and Afghanistan, and conflicts brewing elsewhere in the Middle East and Africa, Christian is forecasting that silver could hit $17 or even $20 per ounce during the first six months of this year, though he says the yearly average will be closer to $12.50 per ounce.

For gold, he’s predicting an average price of $616, with the potential for gold prices to spike above $700 or even $800 per ounce during the first half of the year. Prices for both metals will moderate in the second half of the year, when the world situation is more stable, Christian said.

Higher metals prices have bolstered the Inland Northwest’s mining industry over the last several years. Many firms have new projects under way in the U.S. or Latin America.

Coeur d’Alene Mines Corp. is building new mines in Alaska and Bolivia. Hecla Mining Co. recently expanded its Lucky Friday silver mine in Mullan, Idaho, and is boosting its exploration programs in Latin America. In north-central Washington, Kinross Gold has started construction on the Buckhorn Mountain gold mine, which would employ 160 people.

Higher prices have also prompted new looks at old mines. A Canadian firm purchased the long-closed Crescent Mine in Shoshone County late last year, with hopes of reopening the silver mine.

Higher metals prices are also reflected in the paychecks of miners in Idaho’s Silver Valley. Hourly workers get bonuses when silver prices hit certain targets, potentially adding thousands of dollars to their annual pay.