Gold discoveries and exploration $$13 Mar 2019 23:23
Having weathered another PDAC the big picture for gold is that we must be heading into a solid bull market, perhaps like no other !
The central banks have boxed themselves into not being able to push the interest rates up, as the world has drowned in debt. Too many PhD's and not enough people who know how the real word works.
Less than half of the gold discoveries made since 1950 have turned into mines so far... 3,500 gold discoveries review by Richard Schodde.
$54.3-billion has been allocated to gold exploration over the past decade, almost 60% higher than the $32.2-billion spent over the preceding 18-year period. However only 215.5-million ounces of gold has been defined in 41 discoveries over the most recent ten years, compared with 1.73-billion ounces in 222 discoveries in the preceding 18 years, the report notes (from S&P Global Market Intelligence).
“Even after adjusting for more recently identified deposits that might eventually surpass our threshold for a major discovery, and for major discoveries with potential to expand, we forecast that the gold in major discoveries might only increase to about 363-million ounces over the next decade,” it states
So we still have record high global production of gold, but we appear to be at peak and as noted earlier, there is about a 4x - 5x falloff of new gold oz. discoveries from the past 10-years,
So we are close to entering a market cycle of post peak gold mining production and falling year on year, production, during a period of declining discoveries. Prior to this cycle we are in, mining exploration has been able to provide reserves to the mining industry that have allowed for new production peaks exceeding each prior production peak from 1912; 1940; 1970; & 2001. It does not appear that this trend will continue which should be very bullish for physical gold...
Key drivers
1. Exploration is not replacing production or reserves
2. Conversion of "discoveries" to commercially viable gold mines poor
3. No new exploration technology
4. Low hanging fruit in gold mining well and truly picked over.
The gold bull will charge like no other is my bet, and Centamin is placed very well with their ground holdings.
Position now, and hang on for the ride.
best
the gnome
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