Gold Mining: Investment ‘Must Resume’ as Reserves’ Life Shrinks 1/3rd – by Adrian Ash (Bullion – September 20, 2017)

GOLD MINING investment in finding new reserves “must resume” if global output isn’t to start falling, according to new analysis from a top consultancy.

Studying 11 of the world’s largest stockmarket-listed gold miners, specialist analysts Metals Focus say that current investment spending on exploration and new projects is “well below” the level needed to sustain current production.

“Without investment, the inventory does become depleted,” says the consultancy’s latest Precious Metals Weekly. While “not yet critical”, the productive life-time of underground reserves amongst today’s leading gold mining companies has sunk by one third from the peak of 27 years hit in 2013 after heavy investment to just 18 years today.

To maintain current output levels, Metals Focus says, “Investment in exploration and new projects must resume.” Shares in Kinross Gold Corp. (NYSE:KGC) – the world’s 5th largest gold producer – fell over 7% on Monday after it announced an $800 million investment “essentially [to] tread water” on the volume of metal it mines, according to Bloomberg.

Cashflow will improve as a result of greater efficiency, the newswire quotes Kinross’ CEO Paul Rollinson, but despite the investment – equal to 14% of KGC’s current stockmarket value – “top line production will be similar,” he confirmed, at around 78 tonnes per year.

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