Gold Discoveries Are Declining

There has been a significant decline in new gold discoveries over the past decade as precious metal explorers focus on known deposits.

The world has been using gold for over 5,000 years as a store of wealth. Because it has always been a finite commodity, it has always held trade value. Currently, the price of gold is nearing a historic $2,000 an ounce due to unprecdemted money printing and monetary chaos. 

Now, that same finite nature is making it difficult to discover and explore new gold mines. The known major gold mines in existence are being depleted, and it has become expensive to explore for new deposits.

There have been no critical new gold discoveries for at least three years. A mere twenty-five deposits with sound economics have been discovered within the last ten years—these discoveries amount to only 154.3 million ounces or seven percent of all known gold in existence.

The major reason for this lack of new gold discoveries is that gold mining companies have placed their focus on known deposits instead of risking funds in search of unknown and new discoveries. 

Exploring for new gold deposits requires time, financial resources, and the expertise for the task. In addition, the odds of success are low. Only 10 percent of known gold deposits around the world contain the necessary amount of gold to make exploration and mining worthwhile.

In 1999, the Lumina Gold Corp announced the discovery of Gran Bestia with a supply of 4.2 million ounces.

In 1980, the N-Mining Limited discovered the Chulbatkan deposit in East Russia. The 40 million-ounce deposit was acquired by the Canadian firm Kinross Gold early in 2020.

Nelligan’s, owned by IAMGOLD, is a recent discovery, with deposits of 2.5 million ounces. 

Discoveries of gold deposits have been made in ten African and Latin American countries over the past ten years, which equate to 102.3 million ounces of gold.

Very few new discoveries have been made recently in the US and Canada. Only 17 percent of the gold discovered within the past ten years has been in those countries, compared to 37 percent in Africa and 29 percent in Latin America.

One of the most significant discoveries this past decade was in Ecuador: the Cascabel project. Cornerstone Resources is the founding partner of Cascabel. The only available Tier 1 copper-gold asset in the world not owned by a global, multi-national mining company. Cornerstone owns a 15% carried interest in Cascabel and 7.6% of project operator SolGold or effectively 21.4% of Cascabel. 

The US and Australia were the leaders in new gold discoveries before 2010, with the US accounting for 14 percent and Australia making up 10 percent. Both countries have had one major discovery in the last decade.

There is still gold to be mined and developed. But there are only a few projects devoted to developing major new sources of high-quality gold. 

These projects are needed to replace the mines which are continuously being depleted. Of the deposits discovered in the past ten years, only 30 deposits hold reserves of 10 million ounces or greater of gold, and a mere nine of these mines are of a grade 1 g/t or greater. 

The decline in recent exploration reflects the shortage of discoveries being made. Mining companies are focusing their budgets on known deposits rather than risking their funds on unknown exploration. More exploration for new mines is needed to produce the high-quality gold deposits needed to replace the gold being depleted in older mines. In 2020, financial considerations caused by the COVID-19 have made new exploration, especially risky. It is hoped that this will soon change.