A couple of months back SovereignMan.com’s Simon Black released a note outlining that major gold discoveries are shrinking.
Simply just put, mining companies are no more time locating vast, new deposits of gold to change their getting older mines.
I quoted Pierre Lassonde, the billionaire founder of gold royalty huge Franco-Nevada and previous head of Newmont Mining:
If you search back again to the 70s, 80s and 90s, in every just one of those many years, the field discovered at least just one 50+ million-ounce gold deposit, at minimum ten 30+ million-ounce deposits, and many 5 to 10 million ounce deposits.
But if you seem at the very last 15 yrs, we identified no 50-million-ounce deposit, no 30-million-ounce deposit and only really couple 15 million ounce deposits.
Pierre Lassonde is a person of the most effectively-highly regarded and knowledgeable mining authorities in the entire world. And he thinks we’re achieving ‘peak gold’.
Final thirty day period, Rudy Fronk, Chairman and CEO of Seabridge Gold mentioned:
“Peak gold is the new truth in the gold small business with reserves now being mined much more quickly than they are remaining replaced.”
Nick Holland, CEO of South Africa’s greatest gold producer Gold Fields:
“We ended up all chatting about how generation was going to improve every single year. I consider those people times are possibly gone.”
Kevin Dushnisky, President of mining huge Barrick Gold:
“Falling grades and generation concentrations, a absence of new discoveries, and extended undertaking development timelines are bullish for the medium and lengthy-time period gold selling price outlook.”
But the most significant warning will come from source legend Ian Telfer, chairman of Goldcorp. In an job interview with Money Post, Telfer explained:
“If I could give one sentence about the gold mining enterprise… it’s that in my everyday living, gold created from mines has absent up pretty steadily for 40 yrs.
Properly, possibly this 12 months it commences to go down, or subsequent calendar year it begins to go down, or it’s by now heading down… We’re proper at peak gold right here.”
It is challenging to pinpoint a top or a bottom. But there is an interesting option here due to the fact gold has fallen in selling price over the previous various months many thanks to an inexplicable surge in the US greenback.
The extensive-phrase fundamentals appear to be rather obvious– the people today dependable for supplying the planet with gold are expressing the world is jogging out of gold and that source is declining at an alarming level.
With a commodity like oil, engineering tends to resolve the problem of declining supply by much more productive output methods.
When ‘peak oil’ commenced getting to be a trouble 10 yrs ago, the sector created new fracking and horizontal drilling systems. And other industries like solar and wind began creating better substitutes for oil.
But there is not really a substitute for gold. And the most significant gamers in the room are declaring we’re running out.