A “supergiant” gold deposit, one of the largest ever discovered, has been found in China’s Hunan Province, with an estimated value exceeding USD$83 billion.
Representatives from the Geological Bureau of Hunan Province (GBHP) told Chinese state media on November 20 that workers detected over 40 gold veins, containing 330 tons of gold to a depth of 2,000 meters.
Mining experts predict that up to 1,100 tons (1,000 metric tons) of gold—equivalent to about eight times the weight of the Statue of Liberty—lies hidden at depths of up to 3,000 meters based on their analysis using 3D computer models.
The deposit’s scale is extraordinary, with visible gold observed in many drilled rock cores. The findings mark a breakthrough in deep-earth mineral exploration, as deposits were identified at depths of 2,000 meters, with further exploration planned to reveal potentially even larger reserves
“Many drilled rock cores showed visible gold,” said Chen Rulin, an ore-prospecting expert with GBHP, in an interview with state media.
Experts confirmed additional gold during test drills in the site’s peripheral areas, suggesting the potential for uncovering further large deposits.
Tracking the global gold reserve levels remains challenging due to variable extraction rates and inconsistent reporting. However, in 2022, South Africa’s South Deep gold mine held the largest confirmed reserves at approximately 1,025 tons (930 metric tons). This new discovery in China could surpass it, making it the largest known gold deposit worldwide.
The discovery triggered significant reactions in the mining community and impacted the global economy. Gold prices rose sharply to approximately USD$2,700 per ounce, and USD$95,240 per kilogram, nearing a record high set earlier this year.
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Estimated reserves could exceed more South Africa’s South Deep mine
China led global gold production in 2023, contributing around 10 per cent of the total output, according to Reuters. Despite this, the country consumes roughly three times more gold than it produces, heavily relying on imports from countries like Australia and South Africa to meet demand.
The discovery of this supergiant gold deposit in China is poised to influence the global gold market significantly. The estimated reserves potentially exceed those of South Africa’s South Deep mine, and the find could bolster China’s domestic supply, reducing its reliance on imports and altering international trade flows.
This could also impact gold prices, which have recently surged near record highs. The promise of additional supply tempers market volatility. However, the deposit’s depth and the complexities of extraction might delay its influence, maintaining short-term global gold dynamics.
For major mining companies like Newmont Corporation (TSE: NGT) (NYSE: NEM), which leads the global gold production market, this discovery represents both a competitive and a strategic consideration. Newmont and similar large-cap producers could face increased pressure to innovate and expand reserves, as China’s growing domestic mining capacity shifts the industry balance. Mid-tier companies, including Agnico Eagle Mines (TSE: AEM) (NYSE: AEM) and Kinross Gold (NYSE: KGC) (TSE: K), might view this development in China as a signal to enhance exploration efforts to secure their foothold in the market.
Smaller companies, like Calibre Mining Corp. (TSE: CXB) (OTMRKTS: CXBMF), may experience indirect effects. While their operations might not compete directly with such a massive deposit, global pricing trends and investor sentiment influenced by this discovery could create new challenges or opportunities.
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joseph@mugglehead.com
