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By Earle B. Amey GOLD By Earle B. Amey Domestic survey data and tables were prepared by Mahbood Mahdavi and Wanda G. Wooten, statistical assistants. The world production table was prepared by Regina R. Coleman, international data coordinator. In 2003, domestic mine production of gold fell to its lowest on December 31. The average for the year was, to the nearest level since 1989. The continuing trend toward consolidation dollar, $365 per ounce. The previous year’s price ranged from among the major gold companies was the primary cause of the 7% about $279 to $357 per ounce and averaged $311 per ounce. decline from the 2002 level. Although gold output fell by 21,000 The 12-month London, United Kingdom, gold lease rates in kilograms per year (kg/yr), the value of the U.S. gold production 2003 remained in the doldrums because the demand for lent gold increased to about $3.3 billion in 2003. Stronger global gold fell more quickly than the reduction in the amount of gold lent to prices and the weakening of the U.S. dollar resulted in an increase the market by central banks. Short-term lease rates continued to in gold value for 2003. The United States dropped to the world’s remain near zero (CRU International Ltd., 2004, p. 31). third leading gold producer (behind South Africa and Australia) Total world mine production of gold was about the same as the after being second since 1991 when U.S. production surpassed level reached in 2002. South Africa decreased its annual output that of the Soviet Union. Nevada accounted for more than 80% after a small increase in 2002 but remained the leading producer of domestic production in 2003. The remaining output came from among more than 80 gold-mining nations, followed by Australia, eight other States. Gold was produced at 50 lode mines, about a the United States, China, and Peru. Identified world gold resources dozen large placer mines (all in Alaska), and numerous small placer at yearend 2003 were estimated to be 100 million kilograms mines (mostly in Alaska and the Western States). In addition, a (Mkg), of which 15% to 20% were byproduct resources; the world small amount of domestic gold was produced as a byproduct of reserve base was estimated to be 90 Mkg, and reserves, 42 Mkg. processing base metals, principally copper. Thirty mines yielded [This report uses the resource and reserve terminology of the U.S. 99% of the gold produced in the United States. Geological Survey (USGS), which is republished annually in the Domestic gold exploration activity increased on a total dollar USGS Mineral Commodity Summaries.] South Africa had about basis for the first time since 1997, rising sharply to $113.6 40% of the resources, 40% of the reserve base, and 14% of the million in 2003 from $77.2 million in 2002. The percentage reserves. The United States had about 9% of world resources, 4% of the total world gold exploration budget going to the of the reserve base, and 6% of the reserves. United States increased to 10.8% in 2003 from 9.9% in 2002. About 15% of all gold mined is estimated to have been used Worldwide gold exploration expenditures rose by 34.5% from in dissipative industrial uses or is either unaccounted for or those of 2002 after dropping by 8% in 2002 and by 22% in 2001 unrecoverable (Thomas and Boyle, 1986, p. 6). Therefore, of (Lowery and others, 2004). an estimated 145 Mkg of gold mined in historic times through Commercial-grade refined gold came from about two dozen 2003, 123 Mkg of gold remains in circulation, with about 32 domestic producers. Of several thousand companies and artisans, Mkg held by central banks as official stocks and about 91 Mkg a few dozen companies dominated the fabrication of gold into held privately as bullion, coin, and jewelry. commercial products. U.S. jewelry manufacturing was heavily In a USGS report on undiscovered deposits of gold and other concentrated in the New York City, NY, and Providence, RI, metals in the United States, the amount of gold in undiscovered areas, with other concentrations in California, Florida, and Texas. U.S. mineral deposits was estimated to range between greater In 2003, the estimated end uses of gold were jewelry and arts, than 13 Mkg (90% probability) and greater than 22 Mkg 92%; dental, 4%; electrical and electronics, 3%; and other, 1%. (10% probability) (U.S. Geological Survey, National Mineral According to the World Gold Council (2004), 2003 was the Resource Assessment Team, 2000). The mean estimate of 13th consecutive year of unit sales increases for gold jewelry in gold in undiscovered deposits was 18 Mkg with nearly one- the United States. Total U.S. gold jewelry sales exceeded $16.3 quarter of the gold estimated to be contained in undiscovered billion, up by 2.5% from sales in 2002. porphyry copper deposits. Other major gold deposit types Trade in refined bullion comprised 61% of U.S. gold imports considered in the report were hot spring gold, epithermal vein, and 63% of exports; net exports of bullion increased to 220,000 plutonic porphyry gold, sediment-hosted gold, gold-silver- kilograms (kg), up by 19% from that of 2002. Canada provided tellurium veins, and low-sulfide gold-quartz vein deposits. Total almost 74% of the bullion imported, and Switzerland was the discovered gold resources in the United States were estimated to destination for more than 48% of the bullion exported (tables 4, 6). be 27 Mkg; identified U.S. gold resources were estimated to be The dollar price for gold rose throughout 2003, with the 15 Mkg, and all U.S. gold production totaled 12 Mkg. average price 17% above the average gold price in 2002. Engelhard Corp.’s daily price of gold ranged from a low of nearly Production $321 per troy ounce1 on April 7 to a high of about $418 per ounce In this report, domestic lode mine production data for gold 1Throughout this report, “ounce” refers to troy ounce; 1 kilogram is were derived by the USGS from two separate voluntary surveys equivalent to 32.1507 troy ounces. of U.S. operations—one for monthly production of copper, GOLD—2003 32.1 gold, lead, silver, and zinc from lode mines and the other for expected to be completed in April 2004 (Canyon Resources production of data surveyed annually. Corp., 2004). A survey was sent to all 50 lode gold producers believed to be Western Goldfields Inc.’s Mesquite Mine, near Brawley, operational in 2003; 49 responded. Four of the 49 respondents ceased mining operations in the second quarter of 2002, with the reported that their mines were closed and one reported reopening. depletion of the main ore body. Production from residual heap The individual company production and performance data listed leaching continued in 2003. in table 3 and cited elsewhere in this report were obtained from Glamis Gold Ltd. (through its wholly owned subsidiary Glamis published sources, such as company annual reports. Rand Mining Co.) produced 1,100 kg (34,000 ounces) of gold at Of the total domestic gold produced during 2003, about 94% was its Rand Mine near Randsburg (Glamis Gold Ltd., 2004, p. 5). extracted from gold ore, and the remaining 6% was derived from The Castle Mountain Mine near the Nevada-California State other precious-metal ores, base-metal ores, and placer deposits. line in San Bernardino County, CA, produced an estimated By comparison, similar data assembled for 1980 indicated a 63% 440 kg (14,000 ounces) of gold. Residual gold production was to 37% ratio. In both years, the contribution from placer mines expected to continue into mid-2004 because of continued heap amounted to less than 2% of the total gold produced. leaching (MK Gold Company, 2004, p. 1). Castle Mountain Alaska.—The State’s Division of Geology and Geophysical was a joint venture between Quest Capital Corp. (75%) and MK Surveys reported that gold output decreased to 16,400 kg Gold Company (25%). (528,000 ounces) worth $192 million in 2003 from 17,400 Colorado.—Gold production in the State was 26% lower, kg (562,000 ounces) worth $174 million in 2002, a decrease despite a significant increase in production from the Nation’s in production of about 6% and an increase in value of more ninth leading gold mine, the Cresson Mine, in the Cripple Creek than 10% (Szumigala and Harris, 2004a). Placer production, District of Teller County. AngloGold Ltd. (2004, p. 30) reported which is included in the numbers above, rose to 700 kg (23,000 that this open pit mining operation produced 8,800 kg (283,000 ounces) from 620 kg (20,000 ounces) of gold. ounces) of gold in 2003. Calais Resources Ltd. conducted an The underground Fort Knox gold mine operated by Kinross exploratory drilling program at its Consolidated Caribou project Fairbanks Gold Mining Incorporated near Fairbanks began to in late 2003. The project is located within the northeast-trending produce gold in 1997. Kinross reported that the mine produced Colorado mineral belt (Keller and Carroll, 2004, p. 58). about 12,200 kg (392,000 ounces) of gold in 2003, making it the Idaho.—Meridian Gold Inc.’s closure of its Beartrack Mine country’s sixth leading gold producer (Kinross Gold Corp., 2004, near Salmon in 2001 left Idaho with no active gold mines. p. 27). For purposes of ranking in this report, Newmont Gold Beartrack produced about 130 kg (4,000 ounces) of gold in Company’s Nevada Mines are treated as a single operation. 2003, slightly more than one-half that of 2002.
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