There's been a fair amount of ruminating on the subject of 'Peak Gold' lately, how the industry's most productive years may well be behind us.
It's a disconcerting thought for some.
Others - geo types who's insights are significantly more valid than my own - consider the Peak Gold theory to be pure bunk, lazy thinking... judging by some of the comments I've read online recently.
There are a number of supportive opinions out there though. Randall Oliphant (Chairman of World Gold Council) believes we may have peaked if we haven't already done so.
Brent Cook believes 'Peak Gold' is a misnomer, but goes on to say, "We've passed the peak of discovery and production."
More recently, in a Finacial Post article titled, 'We're right at peak gold': All major deposits have been discovered, declares Goldcorp chairman, Ian Telfer commented, “Are we bad at finding it? Or have we found it all? My answer is we found it all.”
That's an ominous thought. The idea that we've maxed-out most of what our planet's got.
In an article I posted here back in February, I stumbled upon a few interesting points that lend credence to the 'Peak Gold' thesis. Most notable is how South Africa, once boasting annual production of over 1,000 tonnes of gold a half-century ago, produced a mere 167.1 tonnes in 2016. And according to the Environmental Economic Accounts Compendium published by African Statistics Day, South Africa may completely deplete its reserve base in less than four decades.
That truly is an ominous forecast, especially considering South Africa is currently ranked the fifth largest gold producer on the planet. The fact that the prolific Witwatersrand Basin deposits are nearing the end of their life cycles isn't exactly an accommodating factor.
SA, dragged to the bottom of the rankings. That's difficult to imagine.
A ground-level view:
Warning: this is my very own take on the subject...
I've been watching the resource news headlines flash by on my computer screen, week after week, month after miserable month, year after excruciating year (prior to the advent of personal computers I followed developments in the mining arena via major newspapers, brokerage reports [I was the first guy on my block to own a fax machine - mind you, I was living on a Gulf island at the time], and mining-related trade journals like The Northern Miner). What's missing today? Discovery headlines.
It can be argued that there have indeed been a number of significant discoveries over the past decade - both precious and base metal - but what I'm talking about are the Big Ones, the Grand Daddy's, the shake-your-head-in-utter-fucking-amazement type discoveries... the Hemlo's, the Eskay Creek's, the Carlin's, the Pierina's, the Kilo 88's... the FRUTA DEL NORTE's.
(Fruta Del Norte overview - photo courtesy of Lundin Gold)
Who can forget Fruta del Norte (FDN)?
Down to only a few dollars in its treasury, while testing a blind Induced Polarization (IP) anomaly they happened to detour around during their first pass with the drill bit, Aurelian Resources hit a staggering 237 metres of 4.14 g/t gold and 8.5 g/t silver.
Soon after, that colossal hole was followed by intervals assaying 8.4 grams gold per tonne (uncut) across 205 metres, and 24 grams gold per tonne (uncut) across 189 metres.
Truly staggering hits.
If those results flashed across our computer screens today, I suspect they'd trigger more than a few massive coronaries. I know I'd be breathing into a brown paper bag.
Digging a little deeper, adding a little more character to the FDN story:
In April of 2006, after 2 years of regional sampling having generated a number of drill targets, Patrick Anderson, Aurelian’s president recalls:
“We were nearly out of money…We had no audience. The phone calls weren’t being returned. That was very frustrating. The defining moment, of course, is when we made the discovery.”
- 237 metres of 4.14 g/t gold and 8.5 g/t silver.
“I checked (the assay results). Re-checked them. Called up the lab to make sure there weren’t any errors,” Anderson recollects. “I was terrified, terrified that we screwed up somehow.”
It's hard not being romantic about this sector at times...
(above quotes pulled from a Mining Markets interview, March 2009)
Most people know the rest of the Aurelian/Anderson story: all acrimony and political shenanigans aside, Aurelian's stock price soared from a mere $0.40 to over $40.00. In 2008, Kinross acquired Aurelian for 1.2 Billion dollars.
Do you yearn?
In a classic season three episode of Seinfeld, Kramer asked George, "Do you ever yearn? - Often I sit... and yearn."
I yearn. Wanna take a guess at what I yearn for?
NO! It's NOT a return of G.I. Joe with Kung Fu Grip...
(video courtesy of Hasbro, the toy company)
A new World Class GOLD discovery is the headline I'd be yearnin for.
Another Fruta Del Norte caliber discovery hole would suit me just fine right about now.
Imagine the impact 24 grams over 189 metres would have on this tiny corner of the resource world (good continuity throughout the interval, of course). People from all walks of life, all shapes and sizes, would come out of the woodwork for a closer look. If such a hit occurred in a relatively underexplored area in a mining friendly jurisdiction - a TALL order admittedly - it would create a land rush the likes of which we haven't seen since the early days of the Klondike.
(photo courtesy of Nature Tours of Yukon)
With all due respect, I hope Mr Telfer is dead wrong.
Then I think about the funds poured into mineral exploration over the past decade. We've scoured vast expanses of wilderness with our most sophisticated technology, by land and air, probing the surface and subsurface geochemically, geophysically, hydrogeologically. Still, no FDN equal...
We've poked holes to unimaginable depths, pockmarking landscapes the world over. Still no FDN rival... not even close.
What's a fella, an armchair prospector like myself, to think?
If our planet is indeed tapped out, what are our options? Do we wean ourselves off of this precious metal? Do we chase sub .10 g/t material to depths that'll melt the headgear off of an underground miner? Does gold go totally parabolic in the years/decades to come allowing us to dust off sidelined sub-economic deposits?
Your guess is as good as mine. Perhaps we need to explore closer to home. Perhaps we need to drill beneath the streets and avenues in our own neighborhoods...
(image courtesy of Osisko Gold Royalties)
I'd like to think that there are at least one or two FDN's still out there, buried in plain sight, ready to be hauled to surface.
Bring it on. Bring it on Mother Earth...
~ ~ Greg Nolan