Major gold discoveries are failing to replace global production, according to a report by SNL.
SNL Metals Economics Group has revealed that data for 1990-2012 show that the total gold found in major discoveries fell short of replacing global gold production, particularly over the past 15 years.
Based on a 75% resources-to-reserves conversion rate and a 90% recovery rate during production, the estimated potential future production from discoveries made from 1990-2012 averaged 57.3 million ounces per year — only 75% of the global gold production average of 76.3 million ounces per year over the same period.
While it is reasonable to expect resources in these discoveries to grow over time with further exploration, to date only half the total resources in discoveries since 1990 has been converted into reserves or put into production.
Gold exploration budgets directed at finding and defining new discoveries have increased significantly since 1999 and reached an all-time high of more than US$6 billion in 2012, but it remains to be seen how successful these exploration efforts have been.