The Victorian Gold Rush Renaissance
There’s something happening in Victoria right now.
Although many are trying to keep it a secret…
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.
To boot, all that gold was found in a 7,600 square kilometre patch of central Victoria.
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.
Turns out, we’ve barely scratched the surface…
The least amount of gold yet the biggest boom
Here’s a fun fact for you.
Out of all Australian states and territories with an estimated gold resource, Victoria has the second least amount of gold underground remaining…
Victoria has a tiny 1% in recoverable gold
Yet the garden state could be ready for a gold rush to rival the 1850s.
How do we know?
It’s a case of following the clues and knowing who to talk to.
The first clue that there was more to find in Victoria was dropped in an Ore Geology Review report, written all the way back in 1996.
With the abstract of the report saying one geological study said central Victoria is one of the ‘most gold mineralised areas outside of the Witwatersrand in South Africa.’2
To put that into context, Witwatersrand holds around 1.5 billion ounces of gold and produces 40% of the world’s gold.
With the Ore Geology Review report adding:
‘There seems little justification for assuming that all the large deposits have been discovered, and there is reason to believe new deposit styles may emerge to complement the limited current exploration activity which is focussed on the search for extensions and repeats of known deposit types.
‘A major advance in scientific understanding of these oft neglected deposits could kindle a major exploration and production revival.’
Did you see that?
As far back as 25 years ago, a handful of geologists knew that there was more gold to be found…
…yet it wasn’t until 2015 that people really started to believe it.
That year, by the way, was when then owner Newmarket found the Eagle Zone at the Fosterville mine out in Bendigo.
This one section showed strong gold mineralisation…and kicked off interest in the historic gold fields once more.3
What this means is, is that Victoria isn’t as dug out as the experts thought it was.
It’s just that we have to go deeper this time.
And since the Eagle Zone find in 2015, gold mining companies have been quietly exploring in Victoria’s old gold fields once more.
Follow the taxes
The thing is, this is just the beginning.
There were two major indicators this year to show that Victoria is set to stage an incredible gold rush 150 years after the first one.
The first indicator that there is more gold to be found, comes from — would you believe it — a tax whacked on all gold producers in Victoria.
Somehow — for decades, in fact — Victorian gold miners have managed to dodge paying a royalty tax to the state government.
Victoria is the only state in Australia that doesn’t have a royalty tax for gold miners.
Today, Victoria pours 350,000 ounces of gold each year, worth roughly $647 million.
That’s a large sum. So it’s surprising that the local gold companies have been able to dodge the tax man for so long.
Yet back in May this year, the Victorian government whacked a 2.75% royalty tax (the highest in the country by the way) on all Victorian gold miners.
They didn’t ‘consult’ the industry either, just a quiet dumping.4
Of course, I have no doubt the Victorian government did it to plug the hole left by property taxes…
Nonetheless, duping a tax on an entire industry without giving them forewarning tells me the government knows there’s plenty more gold to be found…
…So much so, that in October this year, the Victorian government announced it will open up a mammoth 1,500 square kilometres for gold explorations.
The fact that the Victorian government feels the industry can take a broad tax — now the highest in Australia — is a sign that there is money to be made in the Victorian gold industry.
Then throwing out some plots for exploration is a double whammy for this sector.
Victoria might have the least amount of gold compared to the rest of the country.
But the second Victorian gold rush might not be too far off.
Investors take note.
Until next time,
Editor, The Daily Reckoning Australia