We have passed 'Peak Gold:' we are running out of gold

[mamboni]

Numerical Analysis of Historic Gold Production Cycles and Implications for Future Sub-Cycles


J. Müller

*,1 and H.E. Frimmel2,3


1


Faculty of Mining and Geology, Technical University of Ostrava, 17.listopadu 15/2172, Ostrava-Poruba, 708 33,

Czech Republic, and Einkaufsgemeinschaft für Gold und Silber GbR, Gartenstrasse 28, D-89547 Gerstetten, Germany
2


Geodynamics & Geomaterials Research Division, University of Würzburg, Am Hubland, D-97074 Würzburg, Germany

3


Department of Geological Sciences, University of Cape Town, Rondebosch 7701, South Africa


Abstract:


Gold production at an industrial scale developed with the discovery of gold in Australia and the USA in the middle of the 19th century. Since then the gold production rose exponentially with a rate of approximately 2.0% thus reflecting a first-order production cycle. Within this rise, however, four individual sub-cycles can be identified. The current sub-cycle is predicted to lead from a peak in 2001 of 2,600 tons to a global production of 1,600 tons in the year 2018 or even as little as 780 tons in 2026. Further analysis of these sub-cycles, consideration of declining ore grades and energetic constraints lead us to suggest that the year 2001 indeed could have been the peak-gold year of the main 'Hubbert-style' production cycle. A cumulative achievable gold production between 230,000 and 280,000 tons is derived

from the application of the so-called Hubbert Linearization. This compares well with a minimum of about 285,000 tons of combined past production and known reserves and resources.
Keywords: Global gold production cycle, Hubbert Linearization, peak gold.

http://www.benthamscience.com/open/togeoj/articles/V004/29TOGEOJ.pdf

Mamboni comments: This analysis is most plausible me thinks. I wish someone would perform an analogous analysis of silver - I expect that it would be staggeringly bullish.

[croc]

Mamboni
perhaps not peak gold, but peak easy gold........... we are getting deeper and more arduous areas for gold, there but costs lot more to get it out
I know of areas in PNG and here in oz with gold but expensive to get it, lots of gold rich areas in NZ as well, but off limits to mining

[Santa]

No more gold? Well, I say good. Maybe all those alien reptilian fucksticks known as the Anunaki will finally leave us humans alone.

[mamboni]

Mamboni
perhaps not peak gold, but peak easy gold........... we are getting deeper and more arduous areas for gold, there but costs lot more to get it out
I know of areas in PNG and here in oz with gold but expensive to get it, lots of gold rich areas in NZ as well, but off limits to mining

Agreed! The situation with gold is perfectly analogous to 'peak oil.' Critics of peak oil don't understand that the 'peak' doesn't refer to total stocks but annual flows. For example, there are many trillions of barrels of oil still to be drilled for; but the large bulk of it will cost in excess of $100-200 per barrel and will not be feasible to procure. With gold, many mines are processing ores of such low grade as 1 gram per ton!!! At some point, given the rising price of energy and declining ore grades, and totally discounting monetary inflation, gold will have to rise to many thousands of dollars per ounce just to make mining more of it feasible.

[croc]

yes Doc
same thing,,,,, lift cost in saudi was about 60c and oil in PNG was estimated at $40 dollars a barrell to get out, and that was 15 years ago
Lihir is a good example, main gold bearing ore goes out under the sea. Matter of costs to mine underwater, be interesting to watch. Robotic machines are becoming common,
Rio has mines operated from office in perth, machinery is gps and computer run. Some underground operations (gold) are using remote controlled boggers. It is happening more and more, primarily to get rid of the overpriced truck drivers.

[ShawkNixon]

There are very few ultra productive mines left. Especially in south africa where the mining use to be very fruitful. The grams per ton of mines on average keeps going down. And of course, oil and resources to mine gold is getting more expensive. So the average cost of mining and exploration is much higher these days. Thats one of the great fundamentals of gold. It has low supply increases even with much higher prices because its not easy to find productive mines and their a large stock of existing gold. Hard to increase supply more than 1-2% in any given year even in prices of gold doubled from here.

[shakinginmyshoes]

Mamboni,

When I first caught the gold bug in the early 2000s, I thought then that the most bullish driver for gold, "Peak Gold," would ALSO be not-so-bullish for miners. (Doesn't matter the price on
the spot market; if they can't get it out profitably then the stock will go nowhere.)

So far, the market has proved me right.
The HUI in 2008 topped at 525 with gold at 1000. Here we are in 2011 at 536 -- with gold at 1500, which a 50% gain!!! Where's the leverage? There is none. In fact, there is negative leverage.

Except for a very few stellar performers, like Silver Wheaton (which, even it has not leveraged silver since 2008 but only kept pace) the miners have been total duds.