Dwindling gold reserves
The known gold reserves are declining worldwide. Especially the big gold mining companies are suffering from it, but there are also exceptions
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The research agency Standard & Poor's Global Market Intelligence has examined the development of the mineable gold reserves of the major gold mining companies over the last decade. The lack of new discoveries and the shift from growth strategy to margin preservation were noted.
In addition, in many cases the mining costs are increasing. Also, according to the survey, 16 of the top 20 gold mining companies in the world have seen their production years decline over the period 2010 to 2019, with only two of the major companies having more remaining production years at the end of 2019 than they had at the beginning. These are the Chinese Zijin Mining Group and Fresnillo.
Fresnillo is the partner of MAG Silver: https://www.commodity-tv.com/play/newsflash-with-oceanagold-mag-silver-and-copper-mountain-mining/. Together they are developing the Juanicipio project in Mexico, with the first production tunnel ready for mining in mid 2021. MAG Silver is driving various projects, with the Juanicipio project being the flagship project.
According to S & P Global Market Intelligence, production years have shrunk from 20 to 14 years over the last ten years. The exceptional company Sibanye-Stillwater was not included in this study: https://www.commodity-tv.com/play/mining-newsflash-with-sibanye-stillwater-mawson-gold-and-isoenergy/. This is because the remaining life of its reserves has increased from 12 to 15 years. Sibanye-Stillwater is a major gold producer and at the same time a significant producer of platinum and palladium. The projects are located in South Africa and in the USA. In the first half of 2020, revenues increased by approximately 134 percent compared to the same period last year. An interim dividend was approved.
So there are companies that can buck the trend and shine with positive production years or solid reserves.
Current company information and press releases from MAG Silver (https://www.resource-capital.ch/en/companies/mag-silver-corp/) Sibanye-Stillwater (https://www.resource-capital.ch/en/companies/sibanye-stillwater-ltd/).
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