Is the World Running Out of Gold?

How much gold would you have if you had all the gold that’s ever been mined? Not much. With all the gold ever mined you’d be able to make a cube of solid gold with 60-foot sides. There just isn’t that much gold in the world, and it’s getting harder and harder to find it. In fact, our love of electronic / digital devices maybe part of the problem.

In a report from the Wall Street Journal, it was stated that the world is not far away from exhausting the world’s gold supply if gold mining continues at the current pace. How could we be running out of gold? It’s simple. As gold boomed in the 90s and 00s, the easy-to-access deposits were sapped of their supplies. Now, the gold being discovered is way deeper into the Earth, which means that discovering it takes a lot more work before it can be extracted.

 

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The BBC stated, all the gold mined since the beginning of time has been recycled: A piece of gold mined by the Romans may have been melted down into a gold bar in the 1800s, say, and may have eventually made its way into a consumer product like a gold watch. Those devices, computers and electronics that require only minute amounts of gold to function are changing that gold reuse pattern for the first time in history. Because so little gold is used in this technology, it is not cost effective to recycle it. So, while gold, like air, has remained a static resource on Earth, that’s no longer true. Our gold resources will continue to deplete, one iPhone at a time, one tablet at a time.

Large mining companies are not in the exploraton business. They are producers and not explorers. Junior mining companies on the other hand are the boots on the ground out exploring ever nook and cranny on the planet looking for the next big find and finding that next junior to invest in to take advantage of this depletion scenario is not always so easy. Open-pit or underground gold mines can command high premium prices when bought out buy a senior or major mining company, but it’s hard to find those buy out opportunities.

This year major gold producer Endeavor Gold bought out 100 % of the junior developer Avnil Resources for their gold mine in Mali for $122M, which was at a 48% premium, the reason Endeavor bought this junior was to further strengthen its high-quality project pipeline. Strengthening the pipeline is a real concern for all major gold producers because as they mine and extract gold from their existing gold mines they are constantly depleting their reserves of gold and need to replenish them for future growth, revenue and production.

When it comes to discovering new gold deposits, the low-hanging fruit has likely already been picked. Gone are the days when someone could stumble upon an exposed hunk of gold at the bottom of a riverbed, as James Marshall did in 1848, setting off the California Gold Rush. Every year, the pursuit of gold becomes increasingly more challenging not to mention more expensive requiring ever more sophisticated tools and technology, including 3D seismic imaging, direction drilling and airborne gravimetry. Major gold producers are increasingly buying out junior gold miners that have a gold deposit of merit. Both Guyana Goldstrike and Nexus Gold Corp. are on the verge of the the next big find. Guyana Goldstrike has it’s 880,000 ounce Marudi Mountain project in Guyana and Nexus Gold has a drilling campain in Burkino Faso.

 

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Guyana Goldstrike’s Marudi Gold project could be the next buy out target for a major or senior producer. In Guyana, Cambior which has the operating Omai Gold mine, there is also senior gold producer Guyana Goldfields with their Aurora mine. Guyana Goldfields has over $75M in cash and could be watching the development of Guyana Goldstrike’s Marudi Gold project.

Nexus Gold’s Bouboulou property borders Roxgold’s property. Endeavor Mining is active in Burkina Faso and is watching drill results very close of any juniors in the area. Winter drilling returned 26.69 g/t gold over 4.85 metres (including 8.50 g/t gold over 0.62 metre, and 120.00 g/t gold over 1.03 metres). Hole NGL-17-DD-006 returned 4.00 g/t gold over 6.20 metres (including 20.50 g/t gold over 1.00 metre). NGL-17-DD-009 returned 2.61 g/t gold over 4.00 metres (including 5.92 g/t gold over 1.00 metre), and NGL-17-DD-003 returned 1.80 g/t gold over 5.10 metres (including 6.14 g/t gold over 1.10 metres).

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