The Re-Awakening of the Golden Triangle
Many years ago, a remote and mountainous region in northwestern British Columbia gained considerable notoriety as an emerging mineral district. With a rich mining history, one of the world’s largest silver mines (Eskay Creek, discovered in 1988), and million ounce gold deposits – this area of incredible wealth became known as “The Golden Triangle”.
However, despite its obvious potential, the vast majority of land in this highly prospective region has been left mostly untouched by humans. A combination of factors, including low gold prices and a lack of infrastructure, has led to the area laying dormant for decades.
Today, things are changing dramatically. The Golden Triangle is a new hotbed for mineral discovery, and over 130 million ounces of gold, 800 million ounces of silver, and 40 billion lbs of copper have been found. The amazing part is that this is only scratching the surface of the region’s ultimate potential.
The New Gold Rush
Why is the Golden Triangle at the center of attention again? There are five main reasons:
1. New Deposits Found
The old adage is that the best place to find a new mine is near an existing one. Here are three major deposits in the Golden Triangle that have geologists and financiers buzzing:
Seabridge’s KSM Project is the largest gold project in the world. It recently received the green light from Canada’s federal government to go ahead in 2014.
A porphyry-style deposit, it has reserves of 38.8 million oz of gold, 10.2 billion lbs of copper, and 183 million oz of silver.
This $700 million copper and gold mine entered production in 2015.
Owned by Imperial Metals, it will be in production until 2043 based on current mine life estimates. In 2016 alone, it produced 83 million lbs of copper, 47,000 oz of gold, and 190,000 oz of silver.
Valley of the Kings
The latest, and perhaps most interesting, discovery in the Golden Triangle is slotted to reach commercial production in 2017.
The Valley of the Kings, unlike the above porphyry-style deposits, contains extremely high-grade gold. With 8.1 million ounces at a grade of 16.1 g/t, this deposit has some of the richest ore in the world.
2. New Infrastructure
In recent years, the Golden Triangle has received three massively important infrastructure upgrades:
- Paving of the Stewart-Cassiar Highway (North from Smithers)
- The opening of ocean port facilities for export of concentrate at Stewart
- Completion of a $700 million high-voltage transmission line to bring power into the Golden Triangle
3. Declining Snow Cover
Glacial ice and snow has been retreating in many parts of the region, revealing rocks never seen before by human eyes. Especially in a mineral-rich region such as the Golden Triangle, this is a very exciting prospect for mineral geologists.
4. A New Geological Explanation
The Golden Triangle region has complex geology that has befuddled explorers for decades – but recent work has made the picture much clearer. Geologist Jeff Kyba has put forth the following theory: geologic contact between Triassic age Stuhini rocks and Jurassic age Hazelton rocks is the key marker for copper-gold mineralization.
Most of the Triangle’s copper-gold deposits, whether they are large-scale porphyry and intrusion-related, are found within 2km of this contact. It’s been infamously named “The Red Line”, and this new interpretation of the region’s geology could contribute to BC’s next mega deposit.
5. Gold Price Recovery
Since the “sleepy” days of the Golden Triangle, gold prices have increased 3x, even after adjusting for inflation.
Combined with new infrastructure, exciting projects, and world-class mineral potential, and the Golden Triangle is awake again.
What’s Happening Today?
Today, the Golden Triangle is buzzing with activity.
- The Red Chris Mine is now in operation
- Valley of the Kings is entering production in 2017.
- KSM, the world’s largest gold deposit, is nearing potential construction.
- Historic mines like the Snip Mine and Granduc are being explored using modern methods.
- New high-grade gold is being found. Red Mountain and the old Premier Gold Mine are the sites of some of these discoveries.
- Dozens of companies are on the ground performing all phases of exploration.
Many types of mineral deposits are being tested for, including high-grade gold veins, large-scale porphyries, and VMS (volcanogenic massive sulphide) deposits.
The Golden Triangle is once again the center of the attention, and it could be poised to become one of the world’s most prolific concentrations of mineral wealth.
The Silver Series: The Start of A New Gold-Silver Cycle (Part 1 of 3)
As the decade-long bull run shows signs of slowing, is it time for precious metals to shine? Here’s why it could be the start of a new gold-silver cycle.
The world has experienced a decade of growth fueled by record-low interest rates, a burgeoning money supply, and historic debt levels – but the good times only last so long.
As the global economy slows and eventually begins to retract, can precious metals offer a useful store of value to investors?
Part 1: The Start of a New Cycle
Today’s infographic comes to us from Endeavour Silver, and it outlines some key indicators that precede a coming gold-silver cycle in which exposure to hard assets may help to protect wealth.
Bankers Blowing Bubbles
Since 2008, central bankers around the world launched a historic market intervention by printing money and bailing out major banks. With cheap and abundant money, this strategy worked so well that it created a bull market in every sector — except for precious metals.
Stock markets, consumer lending, and property values surged. Meanwhile, the U.S. Federal Reserve’s assets ballooned, and so did corporate, government, and household debt. By 2018, total debt reached almost $250 trillion worldwide.
Currency vs. Precious Metals
The world awash in unprecedented amounts of currency, and these dollars chase a limited supply of goods. Historically speaking, it’s only a matter of time before the price of goods increases or inflates – eroding the purchasing power of every dollar.
Gold and silver are some of the only assets unaffected by inflation, retaining their value.
Gold and silver are money… everything else is credit.
– J.P. Morgan
The Perfect Story for a Gold-Silver Cycle?
Investors can use several indicators to gauge the beginning of the gold-silver cycle:
- Gold/Silver Futures
Most traders do not trade physical gold and silver, but paper contracts with the promise to buy at a future price. Every week, U.S. commodity exchanges publish the Commitment of Traders “COT” report. This report summarizes the positions (long/short) of traders for a particular commodity.
Typically, speculators are long and commercial traders are short the price of gold and silver. However, when speculators and commercial traders positions reach near zero, there is usually a big upswing in the price of silver.
- Gold-to-Silver Ratio Compression
As the difference between gold and silver prices decreases (i.e. the compression of the ratio), history suggests silver prices can make big moves upwards in price. The gold-to-silver ratio compression is now at high levels and may eventually revert to its long-term average, which implies a strong movement in prices is imminent for silver.
- Scarcity: Declining Silver Production
Silver production has been declining despite its growing importance as a safe haven hedge, as well as its use in industrial applications and renewable technologies.
- The Silver Exception
Silver is not just for coins, bars, jewelry and the family silverware. It stands out from gold with its practical industrial uses which account for 56.1% of its annual consumption. Silver will continue to be a critical material in solar technology. While photovoltaics currently account for 8% of annual silver consumption, this is set to change with the dramatic increase in the use of solar technologies.
The Price of Gold and Silver
Forecasting the exact price of gold and silver is not a science, but there are clear signs that point to the direction their prices will head. The prices of gold and silver do not accurately reflect a world awash with cheap and easy money, but now may be their time to shine.
Don’t miss another part of the Silver Series by connecting with Visual Capitalist.
Why Gold is Money: A Periodic Perspective
Gold has been used as money for millennia. People often attribute this to beauty, but there are basic physical properties for why gold is money.
Why Gold is Money
The economist John Maynard Keynes famously called gold a “barbarous relic”, suggesting that its usefulness as money is an artifact of the past. In an era filled with cashless transactions and hundreds of cryptocurrencies, this statement seems truer today than in Keynes’ time.
However, gold also possesses elemental properties that has made it an ideal metal for money throughout history.
Sanat Kumar, a chemical engineer from Columbia University, broke down the periodic table to show why gold has been used as a monetary metal for thousands of years.
The Periodic Table
The periodic table organizes 118 elements in rows by increasing atomic number (periods) and columns (groups) with similar electron configurations.
Just as in today’s animation, let’s apply the process of elimination to the periodic table to see why gold is money:
- Gases and Liquids
Noble gases (such as argon and helium), as well as elements such as hydrogen, nitrogen, oxygen, fluorine and chlorine are gaseous at room temperature and standard pressure. Meanwhile, mercury and bromine are liquids. As a form of money, these are implausible and impractical.
- Lanthanides and Actinides
Next, lanthanides and actinides are both generally elements that can decay and become radioactive. If you were to carry these around in your pocket they could irradiate or poison you.
- Alkali and Alkaline-Earth Metals
Alkali and alkaline earth metals are located on the left-hand side of the periodic table, and are highly reactive at standard pressure and room temperature. Some can even burst into flames.
- Transition, Post Transition Metals, and Metalloids
There are about 30 elements that are solid, nonflammable, and nontoxic. For an element to be used as money it needs to be rare, but not too rare. Nickel and copper, for example, are found throughout the Earth’s crust in relative abundance.
- Super Rare and Synthetic Elements
Osmium only exists in the Earth’s crust from meteorites. Meanwhile, synthetic elements such as rutherfordium and nihonium must be created in a laboratory.
Once the above elements are eliminated, there are only five precious metals left: platinum, palladium, rhodium, silver and gold. People have used silver as money, but it tarnishes over time. Rhodium and palladium are more recent discoveries, with limited historical uses.
Platinum and gold are the remaining elements. Platinum’s extremely high melting point would require a furnace of the Gods to melt back in ancient times, making it impractical. This leaves us with gold. It melts at a lower temperature and is malleable, making it easy to work with.
Gold as Money
Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.
Perhaps modern societies would be well-served by looking at the properties of gold, to see why it has served as money for millennia, especially when someone’s wealth could disappear in a click.
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