Listing of large gold discoveries that may never be minedIn my opinion, the gold supply is likely to be much tighter over the next 20 years.
The downturn in the industry has resulted in many damages:
*lack of young people entering the industry
*no exploration funds to discover new deposits
*major high grading of deposits as companies try to survive
*aside from the high grading situation, overall grades are substantially lower now - many of the world`s high grade (decent width, highly economical) deposits are long gone
*few mines being build due to lack to project financing
*gold majors are overwhelmed with debt - Barrick (largest producer) focused on surviving debt situation - annual gold production has gone from 8 million ounces to 4 - 5 million
*huge inflation in input costs for miners over the past 10 years (high salaries to attack the limited number of specialists, materials (including large tires), machinery (including giant trucks), equipment, wages, start up CapEx, etc.
In addition, many countries outside of Canada have started to charge huge taxes and/or royalties on mineral deposits.
Furthermore, deposits are no longer as safe in many countries outside of Canada.
Also, very few major gold deposits have been discovered over the past 20 years.
And, of course, the worst impact is the 40% drop in the gold price from its high.
The gold industry is at an extreme low right now. At some point in the future, all of this will begin to severely impact gold supply.
And, impacting it further is the status of some of these large deposits. They may never be mined
1)
Pebble (Alaska) ``The current resource estimate includes 6.44 billion tonnes in the measured and indicated categories containing 57 billion lb copper, 70 million oz gold, 3.4 billion lb molybdenum and 344 million oz silver; and 4.46 billion tonnes in the inferred category, containing 24.5 billion lb copper, 37 million oz gold, 2.2 billion lb molybdenum and 170 million oz silver.``
Northern Dynasty spent $200 million and its joint venture partner pulled out in 2013 after spending $600 million.
Alaska (which is difficult with permits to begin with) will likely never ever grant a mining permit for this deposit. Also, the opposition to mining in the area is massive. The major gold company that threw in the towel after spending $600 million I think understood what type of a battle this is.
That is
107 million ounces of gold and 80+ billion lbs of copper (+ other metals). That is massive. That`s a lot of supply that will never enter the market (in my view).
2)
Rosia Montana - Romania 18,500,000 gold ounces
The battle to bring this into production has already been fought (by Gabriel Resources) and lost.
This is never going into production
3)
Fruta del norte - Equador The total deposit is something like
15,000,000 gold ounces.
Kinross already fought the battle and lost. I think the Equador government wanted something crazy like 70% of windfall taxes on revenues. Kinross has already walked away and written the project completely off.
The project is unlikely to go into production for decades, if ever.
4)
Las Cristinas - Venezuela Total deposit is something like
19,000,000 ounces of gold.
Crystallex already fought the battle and lost. The project was nationalized by the Venezuelian government.
It is unlikely to go into project for decades, if ever.
5)
Pascua-Lama - Chile and Argentina ``The Pascua-Lama project is located on the border of Chile and Argentina, in the Frontera district at an elevation of 3,800 to 5,200 meters, approximately 10 kilometers from Barrick’s Veladero mine. It has 15.4 million ounces of gold reserves and more than 674 million ounces of contained silver.``
The world’s largest gold miner, Barrick Gold, on Thursday said it had suspended construction at its $8.5-billion Pascua-Lama copper/gold mine straddling the Argentine/Chilean border, except for activities needed for environmental protection and to bring the project in line with regulatory compliance.
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``The world’s largest gold miner, Barrick Gold, on Thursday said it had suspended construction at its $8.5-billion Pascua-Lama copper/gold mine straddling the Argentine/Chilean border, except for activities needed for environmental protection and to bring the project in line with regulatory compliance.``
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``SANTIAGO, April 10 (Reuters) - A Chilean court has suspended the construction of Barrick Gold Corp's $8.5 billion Pascua-Lama gold and silver mine after indigenous communities said the project was destroying glaciers and harming water supply.``
This project may never be development into a mine.
There are other large deposits taken off the supply line, in addition to these ones. These were probably the most public ones though.