Another Billionaire Warns "We're Running Out Of Gold"

A few months ago SovereignMan.com's Simon Black published a note explaining that major gold discoveries are shrinking.

Simply put, mining companies are no longer finding vast, new deposits of gold to replace their aging mines.

I quoted Pierre Lassonde, the billionaire founder of gold royalty giant Franco-Nevada and former head of Newmont Mining:

If you look back to the 70s, 80s and 90s, in every one of those decades, the industry found at least one 50+ million-ounce gold deposit, at least ten 30+ million-ounce deposits, and countless 5 to 10 million ounce deposits.

But if you look at the last 15 years, we found no 50-million-ounce deposit, no 30-million-ounce deposit and only very few 15 million ounce deposits.

Pierre Lassonde is one of the most well-respected and knowledgeable mining experts in the world. And he thinks we’re reaching ‘peak gold’.

But, as Simon reports today, he’s not alone.

Last month, Rudy Fronk, Chairman and CEO of Seabridge Gold noted:

Peak gold is the new reality in the gold business with reserves now being mined much faster than they are being replaced.

Nick Holland, CEO of South Africa’s largest gold producer Gold Fields:

“We were all talking about how production was going to increase every year. I think those days are probably gone.

Kevin Dushnisky, President of mining giant Barrick Gold:

“Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook.

But the biggest warning comes from resource legend Ian Telfer, chairman of Goldcorp. In an interview with Financial Post, Telfer said:

“If I could give one sentence about the gold mining business... it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years.

Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.

It’s hard to pinpoint a top or a bottom. But there is an interesting opportunity here since gold has fallen in price over the last several weeks thanks to an inexplicable surge in the US dollar.

The long-term fundamentals seem pretty obvious– the people responsible for supplying the world with gold are saying the world is running out of gold and that supply is declining at an alarming rate.

With a commodity like oil, technology tends to solve the problem of declining supply through more efficient production methods.

When ‘peak oil’ started becoming a problem 10 years ago, the industry developed new fracking and horizontal drilling technologies. And other industries like solar and wind began developing better substitutes for oil.

But there’s not really a substitute for gold. And the biggest players in the space are saying we’re running out.

Comments

MGTOW_MONERO_XMR booboo Thu, 07/12/2018 - 22:11 Permalink

This article is Bullshit. World gold supply was completely cornered by the end of WW2. All of Europe had been looted by Hitler and all of Asia by Japan. Guess where it all went? 

 

Investing in gold means you are at the complete whims of the money changers that control the majority of it. If the supplies get tight out at the retail level, the elite control so much of it that they will always be able to kick the can and keep the price suppressed in the paper casino side by bringing more from their deep vaults to the surface.

In reply to by booboo

J S Bach pc_babe Thu, 07/12/2018 - 22:24 Permalink

This is such bullshit.  We're not "running out" of gold.  There is a finite quantity of the precious metal on earth which is what makes it such a perfect basis for honest currency.  What needs to happen is a reevaluation of the precious metals to the counterfeited dollars, yuan, rebels, pounds and other trading devices the eternal (((corrupters))) have foisted upon our nations.

In reply to by pc_babe

Billy the Poet J S Bach Thu, 07/12/2018 - 22:25 Permalink

Investing in gold means you are at the complete whims of the money changers that control the majority of it.

 

 

Total  bullion  in  private  hands  is  estimated  at  +/- 28,000  tons. Central  banks also  hold  gold,  29,697  tons

http://www.ucdenver.edu/academics/internationalprograms/CIBER/GlobalFor…

 

According to official estimates, around 20,000 tonnes of gold worth over Rs 52 lakh crore is lying idle with households and temples in the country.

https://www.telegraphindia.com/1151119/jsp/frontpage/story_53947.jsp

In reply to by J S Bach

Lore Troy Ounce Fri, 07/13/2018 - 05:11 Permalink

Yeah, the article is muddled.  It's remarkable how things like "Green" ideology and Progressivism can handicap analysis, especially arms-length study of the O&G sector.

  • "...INEXPLICABLE surge in the US dollar."

Facepalm.

  • "...TECHNOLOGY TENDS TO SOLVE THE PROBLEM OF DECLINING SUPPLY..."

Facepalm.

  • "...And other industries like solar and wind began developing better SUBSTITUTES FOR OIL."

Facepalm.

Still, the main gold-related thesis is more or less accurate. The majors are hungry for reserves and struggling to service debt, while the number of really attractive near-term takeover targets can be counted on one hand. When the USD "strength" subsides and Au begins its grand revaluation, the wake-up (shift in sentiment) ought to be captivating.

In reply to by Troy Ounce

Archibald Buttle Billy the Poet Fri, 07/13/2018 - 01:00 Permalink

thanks for the link. as an english lit major (pun baked into the cake there), i always argued against the whole idea of attempting to interpret the author's "intentions." obviously this was an unpopular idea with my classmates and especially the faculty. these people made, or aspired to, a cushy spot for themselves in academia. my attempts to get them to enjoy the story and take away a personal interpretation fell on deaf ears. 

i will wake up in the morning and bust out my dogeared copy of BoC, with the certainty that the rest of that bookshelf will get re-read soon after. i think vonnegut is appropriate reading for these interesting times we are living.

and to your downvoter, read a fucking book. any book.

In reply to by Billy the Poet

H H Henry P P … Nature_Boy_Wooooo Thu, 07/12/2018 - 22:26 Permalink

No, the value of the current supply will just go up.  All it will take is just one event to trigger it, where people give up on the fiat dollar.  Once a currency crisis hits the dollar, it will never again regain its "full faith and credit".  It's a one-time event that is difficult to time correctly but the vindication the likes of Peter Schiff, Mike Maloney, etc. will feel once it happens will be impossible to describe.

It's no wonder Bitcoin is such a wannabe to gold.  If you want gold in digital form, open a Goldmoney account, not that Bitcoin-tulip-dotcom garbage.

In reply to by Nature_Boy_Wooooo

MGTOW_MONERO_XMR H H Henry P P … Thu, 07/12/2018 - 22:39 Permalink

When are you guys going to adapt to the fact your PM's haven't been revalued to sky high levels? It's absolutely ridiculous that you continue to essentially pray, wish and beg for your PM's to make you rich whilst the Elite control all the supply and are happy to keep it suppressed to support their fiat business monopoly. 

 

You need to work with the times, not work against them. Right now Gold is not giving you any yield.

In reply to by H H Henry P P …

Billy the Poet MGTOW_MONERO_XMR Thu, 07/12/2018 - 22:55 Permalink

  the Elite control all the supply

 

You keep saying that but you provide no evidence.

 

Total  bullion  in  private  hands  is  estimated  at  +/- 28,000  tons. Central  banks also  hold  gold,  29,697  tons

http://www.ucdenver.edu/academics/internationalprograms/CIBER/GlobalFor…

 

According to official estimates, around 20,000 tonnes of gold worth over Rs 52 lakh crore is lying idle with households and temples in the country.

https://www.telegraphindia.com/1151119/jsp/frontpage/story_53947.jsp

In reply to by MGTOW_MONERO_XMR

stacking12321 Jungle Jim Fri, 07/13/2018 - 06:25 Permalink

Why 2011?

if you’re going to look at golds ability to maintain purchasing power, look at its long term track record.

someone who cherry-picks data is being dishonest.

not to mention just plain factually incorrect:

2011 gold price average was $1531

current price is $1242, that’s not even down 20%, how do you get "nearly fifty percent"?

are you bad at math, or do you just enjoy going around making false statements?

In reply to by Jungle Jim

Nature_Boy_Wooooo H H Henry P P … Thu, 07/12/2018 - 22:50 Permalink

What you goldbugs fail to realize is that gold can't explode in value without losing the very few actual uses that it has.

 

A fancy necklace becomes so thin it can't even be seen any longer.

 

It becomes too expensive to use in electronics.

 

It becomes too difficult to use as a means if exchange because it is too difficult to fraction down to $50.

 

Ironically skyrocketing gold prices will lead to it's death.

In reply to by H H Henry P P …

Billy the Poet Nature_Boy_Wooooo Thu, 07/12/2018 - 23:01 Permalink

What you fail to realize is that gold tends to maintain its value over time and does not explode.

Peak gold from traditional mining would increase investment in alternate means of production. The article notes that the peak in fossil fuels has been offset by new technologies like fracking and the same would happen with gold. In the long term gold will likely continue to hold its value relative to real goods and services just as it has for thousands of years.

In reply to by Nature_Boy_Wooooo

Teja MANvsMACHINE Fri, 07/13/2018 - 03:12 Permalink

I would think if the market has a relatively stable price for some raw material while there is a continuous production flow of that material, when the flow becomes suddenly reduced, that would lift the price within a short timeframe.

As soon as "recycling" or replacement start to kick in, the price would fall again. But as gold owners are often emotionally (or legally, as central banks) bound, they would not sell their gold that quickly. I would watch for a speculative "exponential" curve and then sell into that curve, spread over time.

In reply to by MANvsMACHINE