Gold Price Effect on Gold Reserves - Gold Reserve Sensitivity31 Jan 2025 07:21
I have posted this information before, but, with the current record gold prices, in conjunction with our new ownership of 100% of Telfer & Havieron, I thought it would be an opportune time to post it again, especially for anyone who may be new here.
This is purely as a rough indication for us now, but Newmont Mining, every year in their annual report, with several assumptions, correlate a rising gold PRICE with gold RESERVE value, with, essentially, reserves increasing by 5% for every USD100 increase in the price of gold.
They show this in their most recent annual accounts, as follows:
QUOTE
GOLD RESERVE SENSITIVITY
A $100 increase in gold price would result in an approximate 5 percent increase in gold reserves while a $100 decrease in gold price would result in an approximate 6 percent decrease in gold reserves. These sensitivities assume an oil price of $75 per barrel (WTI), Australian dollar exchange rate of $0.70 and Canadian dollar exchange rate of $0.75. These sensitivities assume all other inputs remain equal, including all cost and capital assumptions, which may also have a material impact on these approximate estimates.
UNQUOTE
On that basis alone, and, yes, I accept it's full of assumptions, the gold price is already up $300 since we purchased 100% of Telfer and the Havieron 70%, so, very roughly that would increase our gold reserves alone by around 15%.
https://www.newmont.com/investors/news-release/news-details/2024/Newmont-Announces-2023-Mineral-Reserves-for-Integrated-Company-of-136-Million-Gold-Ounces-with-Robust-Copper-Optionality-of-30-Billion-Pounds/default.aspx#:~:text=GOLD RESERVE SENSITIVITY,percent decrease in gold reserves.
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