Himfrcom Reports Gold Prices Expected To Go Upward In Decade Australian Expert

Gold prices are expected to remain on an upward track in a decade to come despite recent fluctuations, said Owen Hegarty, a senior Australian expert in mineral resources.

"For the foreseeable future, or at least in this decade, all reasons to buy gold are positive," said Hegarty, vice chairman of the Hong Kong-listed G-Resources Group, in a recent interview with Xinhua.

Gold is a hedge against inflation and financial and political uncertainty, he said, noting that the world has not come out of the global financial crisis and inflation is looming in major economies, mainly due to their massive fiscal stimulus packages.

"As a commodity, the supply of gold, or gold that has been mined, has been declining since 2001," he said.

Despite the massive funds pouring into exploration of gold mines in recent years, no major gold mines had been discovered, but the physical demand for gold is actually going up, he said.

And such demand is not only out of fiscal purposes but out of jewelry and industrial purposes as well, he said.

People buy gold for store of value, especially in developing countries where GDP is going up, he said.

Due to uncertainty of U.S. dollars, people and governments have to look for another reserve currency to hedge risks, and gold is such a good
reserve currency, he said, citing the fact that India had been back in the market buying gold.

On the recent decline of gold prices after reaching a new high, Hegarty said that "there is some pressure for gold buyers to sell some for
profits, but it will not affect the long-term growth of gold prices."

"From my experience, if the demand is strong, but the supply is weak, the prices will be under tension, the market will be volatile," he said.

Hegarty was the founding managing director and CEO of OXiana Limited, which has now merged with Zinifex to become OZ Minerals Limited, the 3rd


largest mining company in Australia. Prior to Oxiana, he has 25 years of experience in Rio Tinto Group.

On May 13, 2009, G-Resources, previously known as Smart Rich Energy, announced the acquisition of 95 percent interest in Martabe gold-silver
project owned by OZ Minerals. The project is located on the western side of the island of Sumatra, Indonesia.

Hegarty said that the Martabe project is one of the few world class gold and silver mines discovered in recent years.

The project has 7.5 million ounces of gold equivalent resources, and it remains on schedule to produce first gold and silver in the first
quarter of 2011, he said.

G-Resources issued 13 billion shares in Hong Kong stock market in July last year, raising 587 million U.S. dollars.

The purchase of Martabe project cost 220 million U.S. dollars, and the company still has more than 300 million U.S. dollars in cash, said the
vice chairman.

He said that after Martabe project begins to produce gold, the company will look for opportunities of acquiring other gold mines in the Asian
region.

"There are a number of opportunities in the Asian region, because it's a highly mineralized region," he said.