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Analysis of neglect: Gold majors have slashed exploration and development spend since 2012

In my last article on gold, I examined the 43% decline in proven and probable gold reserves from Gold majors over a 13-year period. For this analysis, we use the same data set from ten of the largest global gold producers to look at why gold reserves have fallen so dramatically.

Figure 1 Amount Spent on Exploration by Gold Majors Since 2007

Source: Metals and Mining Research Corporation

Unsurprisingly, gold exploration budgets peaked in 2012, the same year the average annual gold price peaked at US$1,669/oz Au (Figure 1). At its peak, these ten gold producers were spending a total of nearly US$2bn on exploration in just one year.

Between 2012 and 2016 the amount spent on exploration by these companies decreased by over 50%, reaching less than US$1bn in 2016. Since 2016 exploration budgets have gradually risen, reaching US$1.2bn in 2019, but thats still 38% less than the peak in 2012.

Figure 2 Amount Spent on Capex by Gold Majors Since 2007

Source: Metals and Mining Research Corporation

In Figure 2, we can see the total amount spent on capex to develop new projects or continue or expand existing operations since 2007. As with the amount spent on exploration, the amount spent on capex increased from 2007, reaching a peak of US$23.8bn in 2012.

Unlike exploration expense though, the amount spent on capex has continued to fall through 2016 (US$8.8bn) and into 2018 (US$8.4bn), riRead More – Source

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