What is Gold Project Development?Gold project development means taking a known gold resource in the ground and completing work to determine if it can become a gold mine.
While a company may like to say they are a 'gold developer', the reality is that the process is more about evaluation, with the result of that evaluation by no means certain. Gold Project Development To develop a gold project is to take a gold resource and turn it into a mine. There is, however, no certainty that the development process will result in a mine. This will depend ultimately on the results of the technical and financial studies completed during development. There are many potential forms a gold mine can take, but which, if any, of these is viable will depend on the nature of the gold resource itself. The depth of the deposit, the shape, the ore type, the nature of the gold within the ore and so on. It is the developer’s job to find the most economic way of producing gold from that particular deposit. Most gold deposits will never be mined even if the best technical skill is applied to them. However, without a good technical team, deposits that could have become mines can fail to be realised. It is crucial then that the developer have a strong technical team and ideally board management with technical backgrounds. Stages of Project Development Back-of-the-envelope Before beginning the expensive development process, a company will have done back-of-the-envelope calculations to show if the project has a reasonable chance of being viable. This will involve taking the existing resource and roughly estimating other variables (recovery, processing and mining costs). If it appears that with these rough inputs the project is economic then the company will begin development work in earnest. If it appears the project is uneconomic, the project maybe abandoned altogether; held until which time gold prices or technological advancement allows a re-assessment; or worked on further to try and increase the gold resource and so allow a re-assessment. It is a well-known industry phenomenon that there are many marginally economic gold projects that were discovered decades ago but remain undeveloped despite having passed through numerous owners. These projects are just good enough to appear viable, but are not. They are passed from one company to the next, renamed, re-worked, re-promoted and re-hyped to attract new funding - but remain nothing more than gold in the ground. It is tempting to assume that due to higher gold prices all previously-marginal gold projects should suddenly become viable. Not so. Production costs have in many places kept up in lock-step with the gold price, meaning projects that were uneconomic a decade ago remain uneconomic today. The next stage will most likely include some un-announced small scale studies that, if successful, will lead the company to formerly |