Thanks for that news. But it's not only St Barbara and many Australian gold producers are in desperate need of acquisitions, it's most of the gold mines in the world are all suffering from short mine lives with many mines only viable for the next few years while the cost of mining is also increasing. This issue has been known and being discussed in last few years.
That's why I am heavily invested in gold sector atm. Not only because of that though, while long term mine supply declines with rising industry costs, I expect further demand growth particularly for bars on geopolitical concerns and steady increase in jewelry demand. Those should put more pressure on gold price in coming years.
"As to how bad the situation for gold production will get? BMO said that the 10 largest mines that have been operating since 2009 will produce 54% of the gold they used to 10 years ago."
“The top 10 mines in 2009 made up 419.1t, but the current top 10 producing mines make up just 226.87t
"Along with major producers seeing declining numbers, the bank also expects the world’s largest gold producer - China - to report lower gold output this year...Chinese government pushes ahead with its environmental reform policy, prompting the closure of small mines "
"...it looks like gold production has dropped for the second consecutive year. The analysts added that this trend is not expected to shift for at least the next two years."
"...with existing operations continuing to be a drag on supply volumes, and Chinese output in trend decline, a renewed focus on exploring for and developing large, longer-dated gold projects will be required,”
"Although mining companies are increasing their exploration budget, the analyst said that the problem remains the dearth of significant deposits."
ANOTHER PROBLEM: New projects are also finding it difficult to get approval due to environmental factors. Not a problem in VIC (where gov. supports gold mining)
“It is hard to conclude whether new projects shall be commissioned in the next few years regardless of budgets. New projects are also finding it difficult to get approval, two of the larger gold projects being pursued in the last few years were shut down as governments look more and more to environmental factors,... Barrick’s Pascua-Lama and Newmont’s Conga are examples of projects that have been side-lined in recent years due to challenges in getting environmental permits and social license to operate.” ”
"Although gold exploration budgets have fallen from a 10-year peak in 2012, spending on finding new gold ounces remains at historically high levels, with the US$54.3 billion allocated to gold exploration over the past decade almost 60% higher than the US$32.2 billion spent over the preceding 18-year period.
However, the increase in dollars spent has not yet resulted in more new discoveries or discovered ounces compared with the previous period: only 215.5 Moz of gold has been defined in 41 discoveries over the most recent 10 years, compared with 1,726 Moz in 222 discoveries in the preceding 18 years."
NML Price at posting:
9.7¢ Sentiment: Hold Disclosure: Held
(20min delay)