A new study from research and data provider IntierraRMG has pointed to a disturbing trend in terms of a decline in new global discoveries and in particular in gold grades. According to a study which covers announced gold deposit finds over the past 10 years, this decline has been accelerating over the past four years and if the trend continues, which seems likely as the easier-to-find deposits have perhaps mostly already been discovered, then the future of global mined gold supplies will gradually become affected. Indeed global production of mined gold has been plateauing and although running at or around its historic high levels, as the amount of new gold being found diminishes, then global production levels may not be sustainable beyond the next few years unless there is a dramatic turnaround in discoveries.
Graphic courtesy of IntierraRMG
IntierraRMG’s data and analysis shows that the 2 year period from 2003 to 2004 was the best in the study range, with over 400 million ounces of new gold discovered. This includes inferred, indicated and measured ounces with an average grade of 1.65 grams per tonne. In contrast, 2005 and 2006 had the lowest number, with just over 150 million new gold ounces discovered – albeit with a similar grade.
Discoveries then increased significantly during 2007 to 2008 with greater than 390 million ounces. The average grade also increased significantly to 2.65 grams per tonne; the highest in the 10 year period.
Over the next two years, slightly more than 250 million ounces were discovered with a declining grade of 1.25 grams per tonne. This deterioration continued through 2011 and 2012 as the amount of new gold ounces discovered dipped below 225 million ounces with a reduced grade of 1.17 grams per tonne.
In this 10 year study period, Africa led the way with new discoveries of 479 million ounces of gold with an average grade of 2.8 grams per tonne. Next was North America, although with significantly less new ounces of 290 million, and with a much lower grade of 1.3 grams per tonne.
Europe had the third most new discoveries with 240 million ounces but with a higher grade than North America of 2.0 grams per tonne. South America recorded 188 million ounces, whilst Australasia saw 74 million ounces of new discoveries with an average grade of 1.4 grams per tonne.
Glen Jones, Western Hemisphere Director for IntierraRMG concluded, “With global drilling activity waning, IntierraRMG forecasts that the next few years will continue the trend with fewer new gold discoveries.”
While the IntierraRMG study suggests the declining discovery trend will continue – indeed may well fall sharply in the immediate future given the exceedingly tough time being faced by junior gold explorers which is certain to cut drilling activity drastically – improving exploration techniques could reverse the trend in the medium to long term. But this would also suggest that new major deposits found may be in increasingly inhospitable locations and geological conditions. As we have seen in the past couple of years the appetite for expending the huge capital sums now necessary to develop some of the existing ultra large scale low grade deposits has diminished drastically, even more so in areas where risk is seen as high and, although these may be mined eventually this may not be until well into the future.
For further information on the study contact Kelly Chan – kellyc@intierraRMG.com
iPad Version: Picture – A man carries a load of stones to break at a primitive gold mine in Panompa near Phichin: REUTERS/Damir Sagolj