TXRogers wrote: I am currently mired down in yet another typhoon here in Japan. After escaping the volcanic Mount Asama last week. The Sportster is tucked away recovering from The Road, so I have nothing to do today but to take stock of more $hit bouncing around in my head. Including certain memories which seem to bind the decades together in a repetitive and rhythmic tune.
It’s interesting to examine some of the similarities of this emerging Novo story (still in its infancy) in comparison to current facts and historic events pertaining to another well know gold district. It’s a critical examination for Novo investors that are speculating on the potential of the Pilbara district potential.
Current Ranking of Global Gold Mining Nations As seen in the chart below, China takes the number one spot of global gold producers by a wide margin, extracting 87 tonnes more than second place Australia. The top 10 rankings remained unchanged from 2017 to 2018, with the exception of Indonesia and Peru switching between sixth and seventh place, respectively. Of the top producers, Indonesia posted the largest annual gain, boosting output by 23 percent.
https://www.bullionbypost.co.uk/media/uploads/pages/images/2019/05/02/2018_Top_10_gold_producing_countries.jpg Below are more details on the top 5 out of the 10 countries with the largest gold production in 2018, beginning with the top producer and top consumer of bullion, China
1. China – 399.7 tonnes
For many years China has been the top producing nation, accounting for 12 percent of global mine production. However, this is 6 percent lower than 2017 and marks the fourth consecutive year of declines. The downtrend is largely due to tighter environmental policies imposed by the government. For example, stricter control over the use of cyanide at gold mines forced several operations to cut back production.
2. Australia – 312.2 tonnes
Australia, on the other hand, has posted six consecutive years of increases in production, up by 6 percent in 2018. GFMS reports that Newcrest’s Cadia Hill mine set a record-high production of 23 tonnes, which is a 38 percent increase from 2017. AngloGold Ashanti production posted a 12 percent increase while Kirkland Lake grew by 21 percent. The minerals industry produces over half of Australia’s total exports and generates about 8 percent of GDP.
3. Russia – 281.5 tonnes
A massive 83 percent of European gold comes from Russia, which has been increasing its production every year since 2010. Russian output grew by 11 tonnes in 2018, or about 2 percent, as policy makers are focused on growing the industry. Who is the largest buyer of Russian gold? The Russian government, of course, which purchases around two-thirds of all gold produced locally.
4. United States – 253.2 tonnes
American gold output rose by a whopping 10 percent in 2018, marking the fifth consecutive year of growth. Production was supported by higher grades at Newmont’s operations in Nevada. In fact, around
78 percent of gold produced in the U.S. is from Nevada. 5. Canada – 193.0 tonnes
Canada inched up two spots on the list last year, and has kept the number five spot in 2018 – producing 17 tonnes more year-over-year. In 2017 Toronto-based Seabridge Gold stumbled upon a
significant goldfield in northern British Colombia after a glacier retreated and is estimated to contain a whopping 780 metrics tonnes. This could be a source of increased output in the coming years.
The List Ranking of the United States I would like readers to take special notice to item 4. Above: The good ole U.S. of A.
Because in some ways, America’s high-ranking position on the gold miners list is actually the result of a paradigm shift that occurred a few decades ago, and shares similarities to where we currently stand with this Novo story (which I will explain further down).
Nevada is the origin of almost 6% of the global production and 78% of the US production of gold. Carlin deposits have an interesting history because the first one of this deposit group was discovered only in 1961, despite Northern Nevada having been crisscrossed by prospectors for over 100 years. But it wasn’t until the mid-1980s when Barrick performed some deep drilling that the true potential of these deposits really took off.
In these deposits,
gold does not occur in the form of nuggets or veins, but is hidden -- together with arsenic -- in pyrite, also known as 'fool's gold'. The term Carlin-type gold deposit is often enthusiastically raised in the mining industry to describe a stockpile of gold eager to be exploited. However,
Carlin-type is very low-grade, which is characterized by the size of gold ranging from slightly visible to microscopic, in what is called “invisible gold”. The gold is found embedded or dissolved within other more prominent minerals such as arsenopyrite and pyrite (properly referred to as fool’s gold). But in what Carlin lacks in grain size it makes up for in tonnage as Carlin-types are found in extraordinarily large deposits.
The Carlin Trend, part of what is also known as the Carlin Unconformity, is 5 miles (8 km) wide and 40 miles (60 km) long running northwest-southeast, has since produced more gold than any other mining district in the United States. The trend surpassed 50,000,000 troy ounces (1,600 t) of gold in 2002. The Carlin and other mines along the trend pioneered the method of open-pit mining with cyanide heap leach recovery that is today used at
large low-grade gold mines worldwide. New ore deposits are still being discovered and developed along the trend.
The Carlin trend is believed to contain 180 million ounces of gold alone, contributing to Nevada’s title as second largest gold deposit in the world behind Witwatersrand, South Africa. Nevada gold mining represents 78% of gold production in the United States at 6.195 billion dollars annually (2015) and 5.8% of global gold production. These deposits can be quite small (>100 tonnes of gold) to
very large (>250 tonnes of gold) with grades averaging from less than 1 g/t to 20 g/t. They have been described as the “elephants of gold deposits” due to the amount of gold they contain.
The
Carlin-type gold is “invisible” and in early exploration, explorers overlooked mining in the region, but with gradual advancements, the feasibility of projects grew to the level of significance that it is today. These deposits that are currently being extensively mined are characterized by very fine gold-sometimes referred to as "micron-sized gold" or, more topically, "invisible gold. " Virtually all the gold in these deposits is so fine that it cannot be concentrated by panning. The old-timers who worked solely with the gold pan for over a century were therefore at a distinct disadvantage and, although they must have panned most of the creeks draining the Tuscarora Range north and south of the Lynn district placers, they failed to detect any significant indications of the
millions of ounces of Carlin trend gold that have since been discovered by more appropriate or more sophisticated methodology during the past 45 years.
Gold production in the Carlin Trend has been and continues to be dominated by two major gold companies: Newmont and Barrick. Although the size of individual gold particles is only microns in diameter, the sheer volume of the area’s deposits makes projects highly economical.
https://tsxmedia.com/wp-content/uploads/2018/03/2018-01-08-NM-Nevada-Regional-Map-782x1024-1-696x911.jpg The Current Status of “Carlin Size” Gold Discoveries As explained above, the Carlin “invisible gold” deposits were passed over and remained unknown for the first 100 years of Nevada’s mining history. But once exploration geologists identified how these building blocks come together as the source of the richest gold mineralization in Nevada, they quickly went to work.
It’s a good thing because Nevada’s Carlin Type deposits have a combined endowment of more than 250 million ounces, which is even more concentrated when you realize 85% of these ounces come from only four clusters or “camps” of deposits: Carlin, Cortez, Getchell, and Jerritt Canyon.
https://tsxmedia.com/wp-content/uploads/2019/05/NV-USA-GoldTrends-v10-y4-1.gif During the 1980s and 1990s, explorers discovered large new Carlin deposits in Nevada every couple of years. While Nevada is still a beehive of gold exploration, after more than three decades of intense exploration, the rate of major discoveries has now fallen to only about one per decade, and in fact the last near-surface deposit discovered was Long Canyon, almost 20 years ago (in 2011 Newmont paid CA$2.3 billion to acquire Mark O’Dea’s Fronteer Gold and the Long Canyon project).
With such a radical decrease in discoveries and only about 108 million ounces of remaining gold reserves, Nevada’s mines have only about 20 years of production left at current levels. This lack of new major discoveries is much bigger than just a Nevada problem — it’s no secret that new gold discoveries are lacking worldwide. Many analysts believe the world is heading to peak gold production as early as 2021.
Wow…all these riches and exploration activities are the result of “invisible gold”. And it now finally seems to be disappearing (no pun intended). I think it’s time to take this all to a new level. Here is a radical idea: Let’s try and figure out how to make business out of near surface “visible gold” instead.
Which Brings us to the Pilbara and Novo Resources The market is basically viewing Novo Resources as a “I’m from Missouri, you’ll have to show me” story. Well, all I can say is that I am NOT from Missouri (no disrespect intended the people of that State). But, I have always enjoyed the fun and excitement of Nevada much more. And based on their attitudes towards gambling and gold, I’m quite comfortable with that.
The Carlin Unconformity in Nevada is 5 miles (8 km) wide and 40 miles (60 km) long running northwest-southeast. Or approximately 500 sq-kms. It helped propel the United States the world’s 4
th largest gold producer. And mostly on very low-grade open pit minable gold. Nevada gold mining is essentially a multi-$billion business based low grade gold deposits of “invisible gold” that was undetected for over a century prior to discovery. A discovery that was more a result of technological change and the application of new scientific processes for extraction. Does that sound ridiculous to you? Or does it sound eerily familiar? For investors that jumped in during the early 1980’s, I am sure you are all big admirers of Nevada gold. And the technologies and processes that brought the “invisible gold” into the bright lights of center stage.
In Novo’s case, we have a Missouri market crowd that won’t be appeased even when
visible gold is presented. Even by a company run by a top geologist, backed by world class mining shareholders, and a near surface potential gold prospect spanning approximately 13,000 sq-kms. However, in the case of Novo the opposite end of the spectrum is not hidden – it is clearly in view. Not of “invisible gold” in rock solution, but clearly visible and abundant coarse gold at surface. The path through the “Paradigm Shift” of exploration and discovery will be similar: Technological and Methodical in nature.
I think it’s best that the Missouri market folks stick with soybeans, corn, cotton, hay and wheat for the time being – none of which people from Nevada (and NW Australia) would know anything about. The Pilbara may not be putting food on the table yet, but it most certainly is worth a toss of the dice. Like any Nevada player would surely agree.
Tx