Wayne Murdy, chief executive of Newmont, a major gold producer, told the Reuters Global Mining and Steel Summit in New York that a recent price forecast of $850 per-ounce "doesn't sound unreasonable."
Newmont President Pierre Lassonde made the forecast in May in his capacity as current chairman of the World Gold Council, saying that the highs would last for the next 18 months.
Gold, which hit a 26-year high of around $730 last month, on Monday closed in New York at $643 and was down in London on Tuesday at $628.
"I don't muzzle Pierre... we think it's a good situation for gold," said Murdy. "We think there's still a long way left in this run," he said of the price.
Asked about world gold production, Murdy said there were several major new projects still awaiting to come on line, although he was not concerned about gold deposits dwindling.
"I think we could be in a flat, and I'm talking within a couple of percentages, flat to declining production for the next 5 to 10 years," he said.
"We're an industry that has very long lead times for new projects. It takes 5-10 years from the time of discovery until you get it into production.
"The exploration money is there, juniors (smaller, gold explorers) are clearly moneyed up," said Murdy. "It's a hell of a lot better than it was in 1999!"
As for Newmont, he said the company had strong margin growth in the first quarter of this year, when profit more than doubled as the gold price soared.
"We see that continuing next year," said Murdy. "With the new mines coming on, we'll see growth in units and margin in the years 2008 and 2009."
With the average realized price last year at $441, rising to $555 for the first quarter, "we think this is a very good time to buy Newmont stock," he said.
With high prices for energy and other commodities, a weaker dollar and interest rates inching up, Murdy said the time was ripe for investors who traditionally seek a safe haven in bullion.
"This is the strongest economy in the world and will be for a long time. "We think it's a good situation for gold for a number of years."
