World's gold deposits are drying up

Natural Resources Holdings produced a terrific report—which lists the world's top 50 producing mine and undeveloped deposits—that warns there is a paucity of exploitable gold in the coming years.

"In our view a mine or deposit is an asset no different than a farm, commercial property, or financial security. Yet when it comes to gold, there are only 439 assets that meet the industry perceived economic threshold of 1 million ounces," writes the authors.

Of the 439 mines or deposits over 1 million ounces, only 189 are in production and has an owner with over $1.8 billion market capitalization. The remainder are owned by juniors, private companies or government sponsored enterprises.

And even with all the exploration money that has been pouring into the mining sector, the report finds no discernible impact on growing the amount of gold available.

"This was surprising as historically high gold prices have provided nearly unprecedented capital to gold exploration companies and we had assumed that after tallying up the year’s discoveries there would be a significant nominal gain in ounces."

The undeveloped deposits also had markedly lower grades requiring more energy and capital expenditure, let alone the escalating regulatory hurdles to get a mine off the ground.

The authors note that Pebble, Reko Diq, Donlin, KSM, and Rosia Montana—which represent nearly 20% of the undeveloped ounces in their list of undeveloped deposits—are unlikely to become mines for 10 years and longer.

Graph from NRH Research – 2012 World Gold Deposit Ranking