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Canadian Gold Mining Has Potential To Be #2 In The World - Wood Mackenzie

Kitco News

(Kitco News) - Mining investors might want to pay more attention to Canadian projects as the country is expected to have strong production growth in a world that is seeing a decline in the quality of gold deposits, according to one search firm.

Canada's largest gold mine, Malartic Mine, Quebec, Canada

In a presentation during the 2018 Prospectors & Developers Association of Canada (PDAC) convention, Vince Madden-Scott, manager of gold cost services at Wood Mackenzie said that his firm sees Canada’s gold production pushing above 300 metric tonnes within the next five years, an increasing 80% from current production levels.

WoodMac’s projections would make Canada the world’s second-largest gold producing nation, behind China. Currently, Canada is the fifth largest producer in the world, Australia, Russia, and the U.S. all recorded higher gold production last year.

Madden-Scott noted that the nation that has the most potential is Chile as its domestic gold production is expected to grow 270% and output pushes to 100 tonnes of gold within the next five years.

WoodMac’s research shows that Australia’s gold sector could see the most significant fall as the firm expects the nation’s gold production to drop 23% over the next five years. The U.S. is expected to see a drop of 16% in its gold production.

Madden-Scott said that the issue faced by the gold sector is a lack of quality gold deposits in the production pipeline. He added that a lot of current deposits depend on prices holding above $1,300 an ounce. WoodMac’s long-term outlook for the gold prices is around $1.300 an ounce.

Madden-Scott said that Canada has embraced its domestic potential as money flows into in the nation’s exploration sector. In particular, he highlighted the growth potential in Canada’s Yukon Territory, which in the last few years has seen a surge of investment capital from all the major gold producers.

“Canada is truly blessed,” he said. “It still has a lot of untouched territories yet to be explored,” he said.

Not only does Canada have the most mineral potential, but Madden-Scott also noted that costs are relatively low. He explained that Canada is in the middle of the range of the cost curve.

However, mining costs in Australia are increasing as mines are getting deeper and deeper, he added.

Russia currently has the lowest mining costs in the world, according to the firm’s research.

“Reserve attrition is a major issue and it’s going to take a refocus from mining companies to change the trend,” he said.

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