Really good article. It just goes to show that prospective and minable gold sights are beoming rare (and worth their weight in.... NO). Someone should let ed know about this finite resource. I can see a day in our lifetime when asteroids are mined. Don't tell Ed though, he's got some digging to do, before he dilutes the shares for rocket fuel!!!
Analyst Eugene King at Goldman is not drawing up imaginary price scenarios, rather he is looking at the trend of discoveries. And he is not the first to be alarmed by what those figures show.
For example, the gold price in 2008 was still rising. The metal had begun that year at $835/oz, enough to whet the appetite of any gold explorer, and it kept climbing to near $1900/oz by 2011. Yet gold discoveries did not buck up – and, remember, the gold boom was then in its seventh year, so the mining industry had lifted its exploration game considerably. In fact, discoveries reached their zenith in 1995; that year, 140 million ounces of mineable gold were found. In 2013, the discoveries totalled fewer than 10Moz.
Goldman warns that, based on present resource figures, the world has only 20 years of the metal left to dig out of the ground.
Of course, much more gold will be found and discoveries (and increases in resources) are still occurring. But the trend is worrying, and raises a real question as to how long the world’s miners can sustain global annual production around the 3000t mark. Some say not much longer.
Let me refresh your memories of a report produced last July by US consultancy, SNL Metals and Mining. It pointed out that, in the previous 24 years, mining companies had discovered 1.66 billion ounces of gold (across 217 major discoveries). But while this was an impressive figure, that discovery total fell short of the 1.84Boz actually mined over the same period. Taking discoveries of 2Moz or more, 124 deposits with a total 1.1Boz had been found in the 1990s, but between 2000 and 2014, 93 discoveries had been made totalling 605Moz. SNL estimated that the amount of recoverable gold discovered since 1999 could eventually replace just 50% of the gold produced over that time.
And, while we’re at it, it should be noted that the gold price as expressed in US dollars is gradually losing its influence. As the World Gold Council points out, China and India account for 50% of gold demand and Southeast Asia takes another 9%. Much of these sales are settled in currencies other than the greenback and that trend will continue as more gold exchanges (Thailand wants one) and gold contracts are established in Asia. Which means gold demand will be less and less affected by any surge in the value of the US dollar.
After all, these products and exchanges would not be on the go unless there was sound reason to think that Asian demand would not only stay strong but keep growing. Which, of course, means a strain on availability if Goldman and others are right and world mine output begins
2015 should improve as the season develops, but methinks 2016 or possibly even 2017 will be when this really gets into gear....but wtfdik...??....I thought 2012 was the year I retired off the back of mr sloweys frantic (ahem) efforts.....lol
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