A junior resource company’s place in the food chain is to acquire projects, make discoveries and hopefully advance them to the point when a larger mining company takes it over. Discoveries won’t be made if juniors don’t have boots on the ground, if they aren’t out in the bush poking around and breaking rocks.
However, S&P’s report noted that while the number of discoveries and amount of gold continue to grow each year, most of the assets were discovered decades ago…. “The higher exploration budgets since 2017 have contributed to more and initial larger resource announcements. From 2017 to 2023, there was an average of 42 announcements with an average of 24Moz of gold each year compared to an average of 30 announcements and 13Moz of gold when gold budgets were declining.”
“Based on the latest monthly Gold Commodity Briefing Service, we expect gold supply to peak in 2026 at 110 million ounces, driven by increased production Australia, Canada and the US — countries that also account for the most discovered gold.” In 2023, 4,448 tonnes of gold demand minus 3,644t of gold mine production left a deficit of 804t. Only by recycling 1,237t of gold jewelry could the demand be met. . Will the gold mining industry be able to produce, or discover, enough gold, so that it’s able to meet demand without having to recycle jewelry? If the numbers reflect that, peak gold would be debunked. We’ve been tracking it since 2019, and it hasn’t happened yet.
INN quoted Pierre Lassonde, co-founder and chair emeritus at Franco-Nevada as saying that retail investors have stayed away from the resource sector in favor of the quick money and flashy profiles associated with big tech firms. Jacqui Murray, partner with Resource Capital Funds, said there’s been a generational shift among private equity funds, with younger managers choosing not to invest in mining for environmental and ethical reasons, especially with the new buzzword, ESG.It takes 10 to 20 years to move an asset from discovery to production, and the vast majority of discoveries don’t even make it to the production stage.
Lassonde also pointed to another fundamental shift within the industry, saying that a steady loss of senior companies in Canada — including Alcan, Falconbridge, Inco and Noranda — over the past 20 years has had a on juniors.
So much of it has vanished – the bankers, the investors and the enthusiasm. In 2010, the mining sector made up 25 per cent of the total value of the Toronto Stock Exchange and the TSX Venture Exchange, more than any other industry. That year, junior miners on the Venture Exchange were able to raise $5.3-billion to fund their exploration and development projects. As of October, they had raised less than half of that, and the sector’s composition of the total TSX has fallen to 13 per cent.
When it comes to raw materials for the electric vehicle industry, China is undisputedly the most dominant force on the planet. The nation is also responsible for nearly 90% of rare earth elements, which are essential raw materials for permanent magnets used in wind turbines and EV motors, as well as 100% of graphite, the anode material in EV batteries. by Rice University’s Baker Institute for Public Policy reveals that China now controls roughly 60% of the world’s production of these minerals which are considered crucial to the global energy transition.
China previously suspended exports of rare earths to Japan following tensions in 2010 surrounding the Senkaku Islands, which also alarmed those in Washington. Last December, China banned the export of technology to make rare earth magnets. Beijing has also tightened exports of some graphite products, and imposed restrictions on exports of gallium and germanium products widely used in semiconductors, CNN stated. to curb technology exports to China—and possibly deter the United States from further restrictions, enabling China to stock up on U.S. technology.
To mitigate the risks of potential Chinese export bans, Industry Week suggests the US government should increase stockpiling, noting the National Defense Stockpile is only around 1% of its 1962 value. Exploration is key for increasing the U.S. mineral supply and decreasing reliance on China. Under Title III of the Defense Production Act , the U.S. Department of Defense is funding some mineral exploration efforts, including in Idaho. Title III also allows the department to fund mineral exploration in Canada, Australia and the United Kingdom, as those countries are considered “