Linking geology, economics, and policy: Implications for the future supply of gold in Canada

Exploration is carried out with the intent of finding economic deposits. The economic returns associated with developing and producing these deposits are a function of their geological characteristics, their economic characteristics and the prevailing government policy in the jurisdiction where each deposit is located.; The objective of this thesis is to model and empirically examine the linkages among the geology, government policy and economics of Canadian gold mines in order to provide a framework for sustainability. It is proposed that the future viability of the industry hinges on the ability to continue to discover and develop the few exceptional or world-class deposits.; A dataset of 228 Canadian lode gold mines in production since 1946 has been compiled and analyzed to assess the linkages among geology, economics and policy. Detailed information recorded in the dataset includes production parameters for each mine and each production year. Data assembled includes tonnes milled, grade of ore milled, metallurgical recovery and gold produced. In total, this dataset represents more than 1 billion metric tonnes of ore milled, 8,000 tonnes of gold production, and 4,000 years of production.; Geological attributes of historical gold mines are analyzed on a year over year basis to discern trends. Overall, the production of gold decreased throughout the 1950's and 1960's and then increased again throughout the 1970s's and 1980's. Average grades decreased significantly over time while the average size as measured by tonnes milled generally increased. The most important structural change over the study period was in the average capacity of a Canadian gold mine which increased from 0.12 million tonnes in 1946 to 0.79 million tonnes by 2000.; Major conclusions of the study are two-fold. The gold mining industry in Canada has experienced effects of depletion. While gold production is at all time high levels, trends on the basis of discovery date and first year of production reveal that new large mines are less common in more recent years. Secondly, the future supply of gold depends on finding mines with high quality geological and economic characteristics. Mines with less than 30 tonnes (approximately one million ounces) of contained gold are essentially irrelevant to the success of the industry accounting for less than 10% of total NPV and 13% of total recoverable gold. On this basis, a new category of deposit based on 30 tonnes minimum contained gold is defined as “Canadian-class”. (Abstract shortened by UMI.)...