THE RATE at which Gold Mining firms are discovering new deposits is falling, despite the industry spending record sums on exploration, the chief executive of the world's largest gold producer has said.
Even if Gold Prices were to rise to much higher levels, Gold Mining production would only see a limit response, according to Jamie Sokalsky, chief executive of Barrick Gold.
"I don't see a surge in gold production if we saw a gold price of $3000 [per ounce]," Sokalsky told a conference Tuesday.
"At a higher Gold Price, we'd still be experiencing the same challenges. I'd suggest there'd be very limited response to that higher gold price."
In a presentation to the London Bullion Market Association annual conference in Hong Kong, Sokalsky said that discoveries of so-called 'supergiant' deposits are rare, with only three made last year compared to 11 in the 1990s.
Ore grades are also down over the last decade, Sokalsky said, while discovery costs, development time and technical risk have all risen.
"It's getting harder to find large deposits and to get those deposits into production takes at least twice as long as it might have taken a decade ago," Sokalsky said in an interview Monday..
"We're not going to see new mines coming in as fast as we thought to replace old mines that are closing."
A record $8 billion was spent on Gold Mining exploration last year.
"Getting mines permitted, dealing with the government and the communities, environmental issues, all of that takes so much longer," Sokalsky said.
"It also costs multitudes more to build a mine and to finance that."
Sokalsky's presentation echoes a report published by Gold Mining consultancy Metal Economics Group earlier in the year, which found that gold discoveries are not keeping pace with production.
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