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Gold Ore A Billion Dollar Industry

Gold Ore A Billion Dollar Industry

December 4, 2017

GOLD ORE.

For thousands of years the word gold is something of beauty or value. Now a days gold is using in machinery or electronic devices. Naturally gold is not always found in 24 carrot gold, miners found the gold ore and extract gold from that ore. As time goes on, it has become more and more difficult to find new areas to mine for gold. Since most of the geologically obvious ore deposits have already been found, prospecting at the industrial scale is more time-intensive and costly than ever. Mining companies are not just looking for gold – they’re looking for new ways to find gold.

Gold is heavy but it does not take up much space. It can be shipped by airplanes or even snow machines if needed. Gold mines do not need special port facilities or large ships to transport the metal they produce. In this way, gold mines can be successfully run in a much wider variety of locations than many other metal mines which can only feasibly be built near ports or the road system.

It is very difficult to mine gold and risky too, mining gold is one of the most difficult task.

GOLD MINER RISKS.

  • Exploration risks:  no gold, or not enough gold, will be discovered.
  • Feasibility risks – a company may discover gold, but at current prices it may be uneconomical to mine.
  • Management risks:  mining companies face substantial upfront costs and ongoing operating costs, and poor management can destroy an otherwise viable asset.
  • Pricing risks:  as gold moves up and down in price, individual companies can experience positive leverage-to-price increases, or go out of business if prices fall too low.
  • Geopolitical risks:  governments can become unstable, leading to unreasonable demands, confiscation of assets, and increasing royalty fees.
  • Financing risks:  during bear markets, banks often refuse to finance operations and, because the share price of many of these companies is so low, raising equity becomes extremely dilutive to existing shareholders.
  • Environmental risks:  mining companies often work in remote areas that are ecologically sensitive. As well, dam and leach pad failures happen from time to time, resulting serious environmental degradation, and possible fines and litigation costs.
  • Stock market volatility:  mining shares often correlate with the broad-based equity markets during downturns in the financial markets. Mining shares are extremely volatile and can lack liquidity.
  • Productivity and efficiency:  mining companies often face major engineering problems such as cave-ins, mill problems, labour issues, increased energy costs, etc.
  • Hedging policies:  mining companies often lock into price agreements that end up destroying shareholder value when major changes in operating costs related to bullion prices occur.
  • Jurisdiction risks :–uprisings, war, political upheaval and disasters are all common problems that mining companies face when working around the world.

 

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