Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.
Gold is always an interesting topic to feature in the magazine because regardless of what it’s doing on the Commodity Index, it seems that everyone wants to read about who’s still producing, or who’s going broke trying to find it?
A few years ago when it was deemed to become a $2,000.00 mineral, gold companies were boasting about their vast reserves and how rich their investors were about to become over the next few months and years ahead. Now, however, with production costs reaching or, in some cases, surpassing the value of the product, many of those same companies have gone dark and silent.
And that’s understandable. After all, it’s a hard thing to accept that what was once a sure thing isn’t worth the effort anymore; even with all of those grams still in the ground.
In fact, anyone involved with gold mining will tell you that it’s one of the toughest minerals to find, and the costs associated with recovering and processing it are among the highest in the entire mining world. And what’s more, the hit-and-miss odds of finding gold, as compared with iron ore, coal and certainly potash, are stacked in Mother Nature’s favour. Quite simply, she hides and protects the stuff really well.
For those of you who have ever looked for a trace of gold in a rock or core sample, you know what I mean. To the untrained eye, it’s invisible and even some hard-core geologists admit that it’s damn-near impossible to see in most cases.
“Visible Gold,” however, is really exciting to look at in its natural setting and it makes me appreciate how much work is involved in getting rid of the host rock before reaching that spec of paydirt.
In any event, gold is still an interesting mineral and it’s just unfortunate that some of the luster has fallen off of it because of the cost to produce it.
Labour and equipment costs are the obvious culprits for the slim-to-no profit margin, but location is also a killer and, like I said earlier, Mother Nature is very protective when it comes her gold. In fact, it’s unfortunate that so much of the world’s gold is so well protected and virtually out of reach.
Take almost anywhere north of 60 in Canada, for example, where vast deposits are known to exist but are, in most cases, inaccessible. Again, it’s largely topographical and environmental issues that prevent mining companies from setting up camps there, but there’s also the shortage of people willing, or skilled enough, to occupy those camps and I think it’s time for Prime Minister Stephan Harper to step in with more than the $100 million for a federal geo-mapping program for the Far North he talked about on his recent trip to the Arctic, and chip in another $100 million or more to actually get something done.
The government’s geo-mapping program is meant to point resources companies toward potential rich veins, but as I mentioned earlier, the mining industry already knows where the minerals are located; it’s the cost of getting them out that’s the problem.
A geo-mapping program is all well and good and shows that the federal government at least recognizes the overwhelming resource potential of the North, but it does little to get the minerals to mills, and market.
The Prime Minister touts that his government’s geo-mapping program has resulted in more than 700 maps that have led to some ‘significant’ discoveries, but those maps have cost nearly half a billion dollars to produce since the program started five years ago.
For that amount of money, I’d rather see the start of another Labrador City where an entire community grew from a single mineral discovery. Where and what, exactly, would be mined, is on those maps and while Mother Nature would probably wish they didn’t exist, they are the maps to Canada’s treasures and should be followed. CMJ