Further evidence of the 'gold production cliff': Intierra

The number of "supergiant" gold deposit discoveries has dwindled from two in the past five years to zero in the past two years and ore grades have tumbled from an average of 12 grams per tonne in 1950 to roughly 3 grams per tonne in Australia, Canada and the US.

As Pierre Lassonde of the Franco-Nevada Corp. gold streaming firm recently quipped: "the next cutoff grade is dirt."

Research released today from Intierra Resource Intelligence adds to this story of decline of both quality and quantity in gold production from 2003 – 2012.

The declining rate of new gold discoveries and grades across the global market during the last decade has accelerated over the last 4 years. Over the course of the 10-year time-frame, Africa lead the way with new discoveries of 479 million ounces of gold with an average grade of 2.8 grams per tonne. Next was North America, although with significantly less new ounces of 290 million, and with a much lower grade of 1.3 grams per tonne.

Data and analysis from IntierraRMG reveals that the 2 year period from 2003 to 2004 was the best in the study range, with over 400 million ounces of new gold discovered. This includes inferred, indicated and measured ounces with an average grade of 1.65 grams per tonne. In contrast, 2005 and 2006 had the lowest number, with just over 150 million new gold ounces discovered – albeit with a similar grade.

Discoveries then increased significantly during 2007 to 2008 with greater than 390 million ounces. The average grade also increased significantly to 2.65 grams per tonne; the highest in the 10 year period.
Over the next two years, slightly more than 250 million ounces were discovered with a declining grade of 1.25 grams per tonne. This deterioration continued through 2011 and 2012 as the amount of new gold ounces discovered dipped below 225 million ounces with a reduced grade of 1.17 grams per tonne.

In this 10 year study period, Africa lead the way with new discoveries of 479 million ounces of gold with an average grade of 2.8 grams per tonne. Next was North America, although with significantly less new ounces of 290 million, and with a much lower grade of 1.3 grams per tonne.

Europe had the third most new discoveries with 240 million ounces but with a higher grade than North America of 2.0 grams per tonne. South America recorded 188 million ounces, whilst Australasia saw 74 million ounces of new discoveries with an average grade of 1.4 grams per tonne.

Glen Jones, Western Hemisphere Director for IntierraRMG concluded, “With global drilling activity waning, IntierraRMG forecasts that the next few years will continue the trend with fewer new gold discoveries.”

 Graph: Intierra