THE GLOBAL stock of Gold Mining reserves could run out in
less than two decades at current rates of production, a new report published
The report, written by Gold Mining analysts at Standard
Chartered, cites figures from the US Geological Survey estimating that global
gold reserves at the end of 2010 stood at 51,000 tonnes – 19.2 years of
production at 2010's production rate, the report's authors estimate.
The report also shows that while exploration budgets have
risen, this has failed to prevent a decline in the rate of new gold
"In response to escalating Gold Prices, exploration
budgets for gold have been rising since 2002," the report says, noting
that 2009 was an exception.
However, "as a result of declining hit rate and cost
inflation, the average discovery cost of primary gold found has seen a rising
trend since 1960, which is evidence that good, large gold deposits are increasingly
difficult to come by."
Higher spending on Gold Mining exploration between 2000 and
2009 coincided with a rate of gold discovery lower than that of 1980-2000,
according to figures from specialist resource sector consultant MinEx.
"It is also worth highlighting that the average ore
grades of new deposits discovered have declined noticeably in the past six
decades," Standard Chartered says, adding that the newest discoveries average
less than one gram of gold per tonne of ore – compared 1.37g/tonnes in 2000 and
2.86 g/tonne in 1960.
Standard Chartered – which in April forecast that limited
production, central bank buying and rising demand from India and China could
combine to push gold above $5000 per ounce – said in the report that it sees
buying physical gold as "the safest way to invest in gold".
Those looking to buy Gold Mining shares should focus on
junior miners, provided they have good production potential, it added.
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