The world holds several hundred active gold mines, but not all are created equal.
Apart from size, what makes a world-class gold deposit? Various characteristics must be considered when determining the status of a gold deposit, including deposit type, average grade and mining and processing costs. Read on to learn more about those three factors and how they can be used to identify world-class gold deposits.
Lode deposits are considered primary gold deposits because they are bedrock deposits that have not been moved. They come in a range of shapes and sizes — indeed, the US Geological Survey notes that they can “form tabular cross-cutting vein deposits but also take the forms of breccia zones, irregular replacement bodies, pipes, stock-works and other shapes.”
In the past, placer deposits were important sources of gold, but today few economically important placer deposits remain in the world. The top gold deposits are now lode deposits.
Grade refers to the proportion of gold contained in ore and is represented in grams per metric ton (g/t). Generally, companies want to find deposits with higher grades as they contain more gold and will usually be more economically sound.
While grade is important, even a high-grade gold deposit can be uneconomic if extracting the gold it contains is too expensive.
Placer gold deposits are generally easier and cheaper to extract gold from, but as mentioned, few economic placer gold deposits remain today — those in existence are mostly low grade and are not large enough to be viable. It is harder to extract gold from lode deposits as either open-pit or underground mining operations must be constructed, but as technology continues to advance, companies are becoming better able to streamline operations and cut costs.
One increasingly important factor weighing on mining costs is that gold production is becoming more reliant on smaller operations rather than individual large-scale mines. This shift has raised development and operating costs in the gold industry as a whole.
In addition to extraction costs, it is important to look at the processing costs a deposit will incur. The type of processing used generally depends on a deposit’s grade, and there are pros and cons to each type. For instance, the US Geological Survey explains that heap leaching and vat leaching are “relatively low-cost processes” that have made it economic to mine lower-grade deposits.
However, these processing methods “extract somewhat less of the contained gold than the cyanide-extraction methods used for higher grade ore.” Ultimately, companies must choose the best method for their deposit while keeping costs as low as possible — world-class deposits will be those where large amounts of gold can be mined and processed at a relatively low cost.
Along with the Nevada Gold Mines complex in the US, other examples of world-class gold deposits include:
This is an updated version of an article originally published by the Investing News Network in 2010.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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