glori, i absolutely agree that the price of gold is the only reason this is happening now. the POG has made a number of previously "un-economical" projects now profitable. companies are reporting resources of under 1gr per ton like they hit the motherload.

the few reports/stories i've read about how investment bankers view a project as "economical" all suggest that they like to see 50% (or less) processing costs. at 2gr per ton or less in quebec this would have been difficult to do at $400oz gold. at $1200oz gold you're making serious money.

judging from the percentage of producing projects that have cash costs of $700+ and very low grades it's difficult to see how the POG will drop dramatically any time soon. there just are'nt enough low cost/high grade projects to meet demand imo..if anything i believe this trend will continue..

my prediction (judging by the 1975-present gold chart): we could see $2500gold before we see $1000gold again.