Gold price has moved lower and struggling to stabilize above the $1900 an ounce level, after hitting record highs above $2,000 in August. Amid the steep pullback, the precious metal is still on hot demand as an investment tool amid the global economy’s uncertainties.
Dwindling Gold Reserves
The surge to record highs came at the backdrop of more than 190,000 tons of gold being produced to date. In 2019, gold production totaled 3,531 tons, a 1% decline from 2018 levels. This marked the first decline since 2008.
A decline in gold production should be a point of concern, given that gold, just like any other resource, is finite. Mining companies estimate that below-ground stock of gold reserves stands at about 50,000 tons. What this means is that there is about 20% still left to be mined. With gold prices at record highs, companies are racing against time to get hold of the most precious commodity.
Gold Mining Activities
Equinox Gold Corp. (TSX: EQX) (NYSE: EQX) is one of the companies that has accelerated its gold exploration and mining activities in the wake of gold prices racing to record highs. The company has since confirmed it has increased its mineral reserves and resources at its Mesquite Gold mine in California.
ORO X MINING CORP. (TSXV: WRP), on the other hand, has moved to strengthen its gold mining project portfolio with the acquisition of the Coriorcco and Las Antas gold projects in Peru. With the acquisitions, the company gains access to highly prospective gold mines believed to possess huge reserves of the precious metal.
Separately Ironspoke Research expects Antioquia Gold Inc. (TSX.V: AGD) share price to increase by 150% over the next 12 months given the strategic partnership that the company has inked with Infinita Prosperidad Minera. Together with Cori Puno, they have invested over $120 million into the company.
Plant expansion to 1,200 tpd is another factor that supports the hefty share price increase. With the expansion, the company should reach optimum capacity by the end of the year. The research firm is also banking on proximity to a number of successful high-grade gold exploration projects to bolster valuation going forward.