Australia’s Gold Rush Renaissance
As my plane touched down on Saturday morning, I quickly reconnected to the internet.
Sure, 14 hours isn’t a long time to be removed from my digital link. But I was flying out of Melbourne early Friday morning, so I’d missed a whole day of news and trading.
I was keen to get back in touch with the world and see what I’d missed.
Turns out, I didn’t miss much.
Same old stories about the Reserve Bank of Australia keeping rates low for longer. Another article talking up the end of the property downturn. More news on celebrity chefs…
Wanting something useful, I flicked to Google’s recommended news. Surely Google’s data-mining technology could direct me to a news story of interest.
And it did.
Somewhere out on the edges of the Victorian town of Ballarat, a man had found a two-kilogram gold nugget.
When asked about the nugget’s size, the man said, ‘You wouldn’t believe it.’ He has been receiving offers upwards of $130,000 for the nugget.
His find is important. I mean, it’s not often a person scores a two-kilogram gold nugget.
What is worth noting, though, is that this man found the gold nugget using a metal detector. And when he dug it up, the nugget was roughly 30 centimetres from the surface.
Ballarat was a key town in the Victorian gold rush. However, mining in the area dried up around the mid-1960s when it was thought all the gold had been found.
Yet, this unnamed man found a hunk of gold barely a foot deep in the ground.
So perhaps not all the gold in Victoria was found after all.
Hanging out in Van City
What am I doing in Vancouver?
I’m here to attend one of the biggest natural resource conferences in the world.
Last month, I interviewed investment guru Rick Rule. As the official part of the chat ended, he kindly invited me to attend the Sprott Natural Resource Symposium, which officially kicks off on Tuesday…here in Vancouver.
Van City, as it’s affectionately known, is based by the ocean, so you’ve got a weird mix of seagull chirps and traffic everywhere you walk.
The coastal mountains to the east of the city are renowned for their mineral wealth, rich with copper, lead, zine, gold and silver deposits.1 And its ore deposits saw the city flourish from prairie town in the mid-19th century to the modern place it is today.
What’s in store for the rest of the week?
More on that in a moment.
You wouldn’t believe it
There’s something happening in Victoria right now.
Although, many are trying to keep it a secret.
However, it won’t take much longer before the secret is out.
You see, there’s a sort of gold rush ‘renaissance’ underway in Victoria.
Historic old mining plots are being reassessed, and it turns out there’s more gold in the state than initially thought.
Since the gold rush first kicked off in Ballarat back in 1851, some 2,400 tonnes — equivalent to 77 million ounces — of gold has been mined. That’s roughly 32% of all the gold mined in Australia, or 2% of all the gold mined globally.
That’s right. All that gold was found in a 7,600 square kilometre patch of Central Victoria.2 3
Here’s the thing. According to the Victorian government, there could be anywhere from 988-2,400 tonnes (30-80 million ounces) of gold remaining.
When the Victorian gold mining rush dried up in the 1960s, gold simply became uneconomical to mine.
It was thought that all the easy gold had been found.
Yet, a couple of years ago, one geological study said Central Victoria is one of the ‘most gold mineralised areas outside of the Witwatersrand in South Africa’. To put that into context, Witwatersrand holds around 1.5 billion ounces of gold and produces 40% of the world’s gold.4 5
The thing is, while miners dug up all the easy gold, people are still finding nuggets not too deep.
So perhaps the area isn’t as tapped out as companies first thought.
It’s just that we have to go deeper this time.
And over the last five years, gold mining companies have been quietly exploring in Victoria’s old gold fields once more.
Underground gold mining in Ballarat resumed a few years ago. Gold mines around Stawell, previously thought to be exhausted, are getting ready to spring back to life.
And one mine at the heart of the new gold rush is rapidly becoming a wold-class gold deposit…
Sprott’s game changer
Eric Sprott has been called the ‘Warren Buffett of precious metals’.
The reason? Eric Sprott is known for finding unloved precious metals companies and making a buck out of them.
Yes, the Eric Sprott I’m talking about is the founder the Sprott Natural Resource Symposium I’m attending this week.
And here’s the thing. Sprott knows a decent mining company when he sees it.
Way back in 2015, he took a small stake in a company called Newmarket Gold — a gold miner pouring around 115,000 ounces a year from a Bendigo-based gold mine.
Four years later, following Newmarket Gold’s merger with another, small-time miner, Sprott is part of one of the best gold mining turnaround stories this decade.
Simple. The geologists suggested digging deeper.
By drilling beyond 800 metres, the gold resource has quadrupled, and the gold grade nearly tripled. All in four short years.
This one site in Bendigo was in danger of being shut down. Yet under the right management, the gold site has been transformed.
Plus, the success of this Sprott-backed gold miner has seen a rush of other Australian gold miners looking to try and replicate the same success — launching a sort of gold mining renaissance in Victoria in the process.
Can they do it? Maybe.
That’s why I’m here.
To speak to those in the know and find out where to look next.
Make sure you tune in tomorrow, as I’ll be writing about this conference all week.