by Andrey Dashkov, Casey Research:
In the mining business, it is said that grade is king. A high-grade project attracts attention and money. High-grade drill intercepts can send an exploration company’s stock price higher by an order of magnitude. As a project moves to the development stage, the higher the grade, the more robust the projected economics of a project. And for a mine in production, the higher the grade, the more technical sins and price fluctuations it can survive.
It is also said that the “low-hanging fruit” of high-grade deposits have all been found, forcing miners to put lower-grade material into production. You could call it Peak Gold—and argue that the peak is already behind us. Let’s test that claim and give it some context.
One of the ways to look at grades is to compare today’s highest-grade gold mines to those from the past. We pulled grade data from the world’s ten highest-grade gold mines for the following chart.
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