Saudi Maaden Gold Production to Rise 30% by 2014, Al Rajhi Says

Saudi Arabian Mining Co. (MAADEN)’s gold production is expected to rise 30 percent by 2014 because of the output of two new mines, said Al Rajhi Capital, the investment arm of the country’s largest lender by market value.

The gold business of the state-run producer known as Maaden hasn’t experienced any significant production growth since achieving its highest level of 203,665 ounces in 2005, the bank said today in an e-mailed report. “Since then, the company has maintained production at steady levels in a bid to increase the lifespan of its existing mines,” it said.

Maaden is developing two new mines, Ad Duwayhi and As Suq, according to the bank, and they are crucial for the gold business of the company as “the existing mines are on the verge of exhaustion.”

Al Rajhi said it “conservatively” expects output of about 240,000-260,000 ounces of gold by the end of 2015, compared with Maaden’s own forecast of 400,000 ounces. “This is based on our assumption of a moderate growth over 2012-2013 and a significant uptick in volumes after the introduction of new mines from the second-half of 2013 onward,” it said.

To contact the reporter on this story: Wael Mahdi in Manama at wmahdi@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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