Gold mining stocks are an alternative way to invest in gold, and as such, they frequently play an important part in the portfolio of astute investors. Investors typically think of gold miners when they consider mining stocks, as these are the businesses that are actively searching for and extracting gold. Gold mining stocks are frequently the go-to hedge for investors looking to protect their wealth while also making a profit from their investments. Gold prices (and, by extension, gold stock prices) can be driven higher by uncertainty and fear in traditional stock markets, as well as by a weakening of the US dollar. As a result of the fact that their prices are not highly correlated with those of the overall market, they can be an important contributor to portfolio diversification.

One advantage of investing in stocks of gold mining companies rather than directly in physical gold is that these investments offer room for growth. In one hundred years from now, the value of one ounce of gold won’t change from what it is today. Gold in its physical form has maintained both its value and its purchasing power over the course of many years; however, it is essentially unproductive because it cannot multiply nor increase in size.

History

It is not known when exactly humans first started mining for gold, but the Varna Necropolis in Bulgaria is home to some of the world’s oldest gold artefacts. The exact date that gold mining was first practised by humans is unknown. The fact that the graves of the necropolis were constructed between 4700 and 4200 BC is evidence that gold mining may have begun at least 7000 years ago. Archaeologists from Germany and Georgia believe that the Sakdrisi site in southern Georgia, which dates back to the third or fourth millennium BC, could be the oldest gold mine in the world.

There is a large quantity of gold artefacts from the Bronze Age, particularly in Ireland and Spain, and there are a number of well-known possible sources. In order to extract gold from extensive alluvial (loose sediment) deposits, such as those found at Las Medulas, the Romans implemented hydraulic mining techniques on a massive scale, such as hushing and ground sluicing, amongst others. The mining industry was administered by the state, but at a later point in time, the mines may have been leased out to private civilian contractors.

Even though there is only one known Roman gold mine located in Dolaucothi, which is located in west Wales, the gold was used as the primary medium of exchange throughout the empire. This was a major factor in the Roman invasion of Britain that was led by Claudius in the first century AD. When the Romans invaded Transylvania in what is now modern Romania in the second century AD, the pursuit of gold was a primary motivation for the campaign in Dacia. Dacia is located in what is now Romania.

The emperor Trajan was in command of the legions, and their victories are commemorated on Trajan’s Column in Rome as well as on the numerous reproductions of the column located in other cities (such as the Victoria and Albert Museum in London). During the reign of Emperor Justinian of the Eastern Roman Empire, gold was mined in several regions, including the Balkans, Anatolia, Armenia, Egypt, and Nubia.

Gold was initially mined in the region of the Kolar Gold Fields in Bangarpet Taluk, Kolar District of Karnataka state, India, prior to the 2^nd and 3^rd centuries AD by digging small pits. This district is located in India. (Golden objects that were discovered in Harappa and Mohenjo-daro have been linked to Kolar thanks to an analysis of their impurities; these impurities include an 11% concentration of silver, which can only be found in KGF ore.)

During the Gupta period, which began in the fifth century AD, mining operations on the Champion reef in the Kolar gold fields extended to a depth of 50 meters (160 feet). The scope of the operation expanded during the Chola period, which spanned the years 9^th and 10^th centuries AD. The kings of South India in the eleventh century, the Vijayanagara Empire from 1336 to 1560, and later Tipu Sultan, the king of Mysore state and the British all continued the mining of the metal after them. It is estimated that Karnataka has produced a total of one thousand tones of gold up to this point in time.

During the 19^th century, a number of gold rushes occurred in remote areas all over the world. These gold rushes included the California Gold Rush of 1849, the Victorian Gold Rush, and the Klondike Gold Rush. Each of these gold rushes caused large migrations of miners. The Second Boer War and, ultimately, the establishment of South Africa were both precipitated by the discovery of gold in the Witwatersrand.

In 1961, geologists in the United States discovered the Carlin Trend in the state of Nevada. Official estimates indicate that total world gold production since the beginning of civilization has been approximately 6,352,216,000 troy ounces (197,576.0 t). Since total gold production in Nevada accounts for 1.1% of that, Nevada is ranked as one of the primary gold producing regions on the Earth.

China was the largest producer of gold in the world in the year 2020, with 368.3 tons of gold being extracted from the ground. Gold was mined in Russia at a rate of 331.1 tons in the same year that it was mined in Australia at a rate of 327.8 tons. Russia was the second-largest producer of gold after Australia.

Methods

The majority of the world’s gold is obtained through a mining technique known as hard rock gold mining. This technique extracts gold from rocks rather than gold fragments found in sedimentary deposits. Open-pit mining is a method that is utilized on occasion, such as at the Fort Knox Mine located in central Alaska. On the Gold strike mine property, which is located in north eastern Nevada, Barrick Gold Corporation operates one of the most expansive open-pit gold mines in all of North America.

Underground mining is utilized at some gold mines, which involves transporting the ore to the surface via tunnels or shafts. The world’s deepest hard rock gold mine is located in South Africa, reaching depths of up to 3,900 meters (12,800 feet) underground. Because the heat is intolerable for humans at these depths, it is imperative that there be air conditioning installed to ensure the safety of the workers. Robinson Deep was at the time the deepest mine in the world for any mineral, and it was the first mine of its kind to ever have air conditioning installed.

By-product gold mining

Gold can also be obtained through mining processes in which the precious metal is not the primary byproduct. Large copper mines, such as the Bingham Canyon mine in Utah, frequently recover significant quantities of gold and other metals in addition to the copper they extract. In the wash operations of certain sand and gravel pits, such as those located in and around Denver, Colorado, it is possible to recover trace amounts of gold. Copper is the primary mineral extracted from the Grasberg mine in Papua, Indonesia, which also happens to be the world’s largest gold producer.

Niche, recreational, or historical methods

A number of countries, including New Zealand (especially in Otago), Australia, South Africa, Wales (at Dolaucothi and in Gwynedd), Canada, and the United States of America in particular, have seen an increase in the number of people participating in recreational gold mining and prospecting. This trend is expected to continue. The practise of recreational mining, which is typically carried out on a small scale, has been contested due to environmental concerns. When old gold placer deposits are disturbed, there is a possibility that pollution from the period following the gold rush will be released again. This pollution may include mercury, which can be found in old mining deposits and mine tailings.

Panning for gold, also known as simply panning, is a method of placer mining and traditional mining in which gold is extracted from a placer deposit using a pan. Panning for gold is also known as simply panning. The method is one of the simplest ways to extract gold, and it is popular among people who have an interest in geology in particular due to the fact that it is relatively simple and does not cost very much.

The earliest instances of placer mining that have been documented date back to ancient Rome. This type of mining involved the use of sluices and panning to extract gold and other precious metals from streams and mountain slopes.

However, the productivity rate is relatively lower in comparison to other methods such as the rocker box or large extractors, such as those used at the Super Pit gold mine, which is located in Kalgoorlie, Western Australia. As a result, panning has been largely replaced in the commercial market.

Placer mining

The extraction of gold that has become concentrated in a placer deposit is accomplished through the process known as placer mining. Because placer deposits are made up of relatively loose material, which makes tunneling difficult, the majority of methods used to extract it involve the use of water or dredging.

It has been a very common practise in prospecting and small-scale mining for quite some time now to make use of a sluice box in order to extract gold from placer deposits. Riffles are typically installed in the bed of a sluice box, which gives it the appearance of a man-made channel. The riffles are constructed to produce dead zones in the current, which enables the gold to settle out of suspension and become more accessible. The box is positioned in the stream in order to direct the flow of water. The component that contains the gold is placed on the very top of the container. The material is transported by the current through the volt, which is the area behind the riffles where the gold and other dense materials settle out. Material with a lower density is discharged as tailings and flows out of the box.

Before concentrating the remaining material in a sluice box or jig plant, larger commercial placer mining operations use screening plants, also known as trammels, to remove larger alluvial materials like boulders and gravel. This is done before the remaining material is concentrated. Equipment that is typically diesel-powered and used for moving earth, such as excavators, bulldozers, wheel loaders, and rock trucks, is typically utilized in these operations.

Dredging

Small-scale miners still use suction dredges for some of their dredging needs, despite the fact that more modern methods have largely rendered this technique obsolete. These are typically one or two-person operations and involve the use of a petty-sized machine that floats on the water. The components of a suction dredge include a sluice box that is held up by pontoons, a suction hose that is attached to the sluice box, and a miner that is working below the water who controls the suction hose.

State dredging permits in many gold dredging areas in the United States specify a seasonal time period and area closures to avoid conflicts between dredgers and the time of year when fish populations spawn. Certain states in the United States, such as Montana, call for a comprehensive permitting process, which includes permits.

Large suction dredges with capacities of 100 horsepower (75 kW) and 250 millimeters (10 in) or more are utilized in industrial production in many parts of the world. The traditional bucket line method is not nearly as effective as modern small suction dredges when it comes to recovering smaller gold. Because of this, the chances of finding gold have increased. Until “color” (gold) appears, smaller dredges equipped with suction tubes measuring between 50 and 100 millimeters (two and four inches) are used to sample areas located behind boulders and along potential pay streaks.

The seasonal low water levels allow for other, larger-scale dredging operations to take place on the exposed river gravel bars. In most cases, these operations make use of a gravel screening plant and a sluice box that float in a temporary pond, both of which are fed by a land-based excavator. The pond was dug out of the gravel bar, and its water supply comes from the underlying natural water table. The “pay” gravel is excavated from the front face of the pond, and then it is processed through the floating plant.

The gold is captured in the onboard sluice box, and the tailings are stacked behind the plant. As the operation progresses, the back of the pond fills up with tailings. This method of mining for gold is distinguished by its low cost, as each rock is only moved one time during the process. It also has a low impact on the environment because it does not require the removal of vegetation or overburden, and all of the water used in the processing is recycled in its entirety. On the South Island of New Zealand and in the Klondike region of Canada, you’ll frequently come across operations like this.

Rocker box

A rocker box, which is also known as a cradle, is a type of gold mining equipment that, like a sluice box, contains riffles inside of its high-walled box in order to collect gold. A rocker box requires less water than a sluice box does and is therefore better suited for locations with a limited supply of water. The required amount of water movement for the gravity separation of gold from placer material is provided by rocking in the opposite direction.

When people think about how gold is mined, the image that typically comes to mind is of people wearing hard hats working underground. However, the mining of the ore is only one step in an extensive and difficult process. Long before any gold can be mined, significant exploration and development must first take place. This is necessary for two reasons: first, to as precisely as possible determine the size of the mineral deposit; second, to as precisely as possible determine how to mine and process the ore in a way that is efficient, safe, and responsible. After a gold deposit has been found, it may take anywhere from ten to twenty years for a gold mine to start producing material that can be refined into bullion. During this time, the gold is stored in a vault.

Find out below about some of the most important stages in the life cycle of a mine.

Exploration of Gold Mines: Between One and Ten Years

Exploration of gold mines is a difficult and involved process. It requires a significant amount of time, financial resources, and expertise in a wide range of fields, such as geology, chemistry, engineering, and geography, among others.

It is extremely unlikely that a discovery will result in the construction of a mine; in fact, less than 0.1% of all sites that are prospected will produce a mine that is profitable. And only ten percent of the world’s gold deposits have enough of the precious metal to warrant further exploration and development.

Once the most fundamental details about the geology of the area and the potential viability of the deposit have been uncovered, it will be possible to model the gold ore body in detail and evaluate the feasibility of the project.

Development of Gold Mines: One to Five Years

The next step in the process of extracting gold from the ground is called gold mine development. It entails the preparation of plans and construction of the mine as well as the infrastructure connected to it. Before they can begin construction, mining companies are required to first obtain the necessary permits and licences. In most cases, this will take a few years, but the exact time required will be heavily influenced by the location.

It’s possible that construction will extend beyond the boundaries of the mine itself. Mining companies frequently build local infrastructure and amenities in addition to potential processing capacity. This is done to support both logistical and operational needs, as well as the welfare of employees and the community. Gold is one of the key initial ways that supports wider socioeconomic development, and this development provides a significant amount of support for local communities over a long period of time.

Ten to thirty years of experience operating gold mines

During the productive life of a gold mine, known as the gold mining operation stage, ore is extracted and processed into gold. This stage also represents the productive life of a gold mine. During the processing of gold, rocks and ores are converted into a highly pure metallic alloy known as doré. This doré typically contains between 60 and 90 percent gold.

Which areas of an ore body are considered profitable (economic) to mine will change throughout the mine’s lifetime depending on a number of factors, such as the price of gold and the costs of the inputs. Mining low-grade ore becomes profitable during periods of higher prices because the higher price more than compensates for the increased costs of extracting and milling greater volumes of material. It is possible that only the mining and processing of higher-grade ores will be profitable when the price is lower or when costs are higher. Mine plans are constantly being reevaluated as a result of shifting market conditions, the appearance of novel pieces of technical information, and the consideration of technological and procedural improvements.

The mining of gold is becoming an increasingly smarter, cleaner, and more efficient process as a direct result of technological advancements. Electrification, digitalization, and automation are becoming increasingly common elements that are reshaping gold mine operations and processes. Mines are now designed with these technologies in mind, and automation, digitization, and electrification are becoming increasingly common elements.

One to Five Years for Closure and Decommissioning of Gold Mines

After a mine has ceased operations, either because the ore body has been depleted or the remaining deposit has become unprofitable (uneconomic) to mine, the focus of subsequent work shifts to decommissioning the mine, dismantling it, and rehabilitating the land on which it was located.

The closing down of a gold mine is a difficult undertaking. In addition to this, a mining company will be required to continue monitoring the mine site for a considerable amount of time after the mine has been shut down.

Cleanup Efforts After the Closure of a Gold Mine

Gold mining companies typically take on management responsibilities of a site for an extended period of time – anywhere from five to ten years or longer – after a mine has been shut down and its infrastructure has been removed. Over the course of this time period, the land will be rehabilitated, which means that it will be cleaned up and replanted, and the mining company will work to ensure that the mine’s land reclamation and return to long-term environmental stability are successful.

Stocks in gold mining companies

One of the most significant drawbacks of investing directly in gold is that there is no opportunity for expansion. Even if you put one bar away for safekeeping and retrieve it after ten years, it will still be the same bar of gold, despite the fact that its value may have increased during that time. The inefficient nature of physical gold is one reason why some investors favor investing in the stocks of gold mining companies.

The prices of the commodities that mining companies concentrate on have a tendency to closely track with the value of mining companies. Nevertheless, due to the fact that miners run businesses that have the potential to expand over time, investors stand to gain from the increased output. Investing in physical gold will never offer the same benefits as other types of investments, such as the opportunity to scale a company and potentially increase share prices.

Investors like the mining industry because of its reliability; mining companies produce metals and other raw materials for consumer and industrial use, where there is a consistent demand for these products. Investors typically classify companies operating in this industry into either the majors or the juniors category.

Junior miners are small mining companies that are still in the exploration and development stage of the mining industry. They have not yet mined any resources and are still in this stage. We delve deeper into the benefits that junior miners offer as well as the potential for returns in our article titled “Junior Mining Stocks: Potential for Massive Rewards.”

The majors are the more established mining companies, typically possessing a large number of mining claims as well as financial reserves to fund upcoming exploration.

Mining companies, like companies in any other industry, are subject to risks, such as swings in the prices of commodities, geopolitical factors in the locations of mines, and the difficulty of locating profitable geological areas in which to stake a claim. In general, gold miners have the potential to outperform gold, but this is highly dependent on the circumstances surrounding each individual miner.

One more thing to keep in mind is that the vast majority of gold miners create other valuable commodities in addition to gold. If you are looking to spread the risk of your investment in precious and semiprecious metals across a wider range of assets, choosing a miner that extracts more than just gold could be beneficial. However, if you are only interested in exposure to pure gold, the extraction of one ounce of a different metal from the ground will dilute the amount of gold you are exposed to by one ounce.

Prospective buyers of gold mining stocks should take into account a company’s mining costs, management team, existing mine portfolio, and expansion opportunities at both existing and new assets when making their selections.

When researching mining stocks, many people concentrate their attention solely on the primary commodity that is produced by the mine. Understanding the entirety of the extraction process is necessary in order to have a proper appreciation for any natural resource, whether it be uranium, gold, silver, palladium, or any other precious metal.

There is no such thing as a “typical” mining project because the geological conditions that are present in each one are unique. The entire lifecycle of a mining project needs to be taken into account in order to properly plan a mine. This is necessary due to the complexity of mine planning.

The 5 Stages of a Mining Project from o3mining.com

Gold mining is the process of extracting gold from its containing rocks and ores. Panning for gold was one of the manual separation processes that were historically used in the mining of gold from alluvial deposits. Pit mining and gold cyanidation are two examples of the more complex extraction processes that have arisen as a result of the expansion of gold mining to include ores that are not located on the surface of the earth. The majority of the volume of mining done in the 20^th and 21^st centuries was done by large corporations; however, due to the value of gold, millions of small-scale artisanal miners have sprung up in many parts of the Global South.

• Exploration

The exploration of gold mines is a challenging and time-consuming endeavor. Exploration requires a significant investment of both time and resources, as well as expertise in a variety of specialized fields, such as engineering, geology, chemistry, and geography. Once fundamental facts about the geology of the local area and the potential viability of the deposit have been established, it will be possible to model the orebody and evaluate its practicability.

• Development

The process of extracting gold from its ores continues with the development of gold mines. It entails the planning and construction of the mine, in addition to the infrastructure necessary to support it. Mining companies are required to obtain all necessary permits and licenses before beginning construction before they can begin mining. Although the time required for this varies greatly depending on location, it typically takes several years to complete.

• Construction

It’s possible that construction will extend beyond the mine itself. Mining companies frequently construct neighborhood infrastructure and amenities to support both logistical and operational needs, as well as the welfare of employees and the community as a whole, in addition to the potential for increased processing capacity. One of the most important and significant ways that gold contributes to economic growth is through the creation of this development. It is a significant source of long-term support for the communities in the area.

• Operation

The gold mining operation stage, also known as the productive life of a mine, is characterised by the extraction and processing of ore in order to obtain gold. During processing, rocks and ores are converted into a high-purity metallic alloy known as doré. This doré typically contains between 60 and 90 percent gold, depending on the grade.

The spot price of gold and the costs of inputs are two examples of the factors that will determine which areas of an orebody are considered profitable (economic) to mine over the course of an orebody’s lifetime. In times of higher prices, mining low-grade ore will become profitable because the higher price will offset the increased cost of extracting and milling larger volumes of ore.

It is possible that it will only be profitable to extract and process higher-grade ores whenever prices are lower or when costs are higher. Mining companies routinely revise their mine plans in light of shifting market conditions and the appearance of new pieces of technical information.

• Decommissioning

The mining operations at a mine will eventually come to an end for a variety of reasons, the most common of which are that the ore body has been depleted or that mining the remaining deposit is no longer profitable. After that, the work will concentrate on decommissioning the structure, dismantling it, and rehabilitating the area where it was located.

The process of closing down a gold mine is laborious and time-consuming, as it involves a wide variety of stakeholders and tiers of government. In addition, mining companies have a responsibility to continue monitoring the mine site long after the mine has been shut down in order to guarantee a smooth and risk-free return to the state it was in before mining operations.

However, despite the fact that each project worth a billion dollars is unique in some way (location, commodity, size), the lifecycle described above is the bedrock of mine development and the foundation of a prosperous mining company.

The Lifecycle of a Mine from investingnews.com

How does a mineral deposit get turned into a mine that actually produces something? The essential phases that make up a mine’s lifecycle are broken down in this article by the Investing News Network.

One of the most important processes that individuals interested in the mining industry should have an understanding of is the lifecycle of a mine. It is possible that each stage of a mine’s lifecycle will take a number of years to complete, and the various processes involved carry varying degrees of financial danger.

The beginning stages of a mine’s lifecycle are when the danger level is at its highest. Junior miners have not yet begun production and still have a long way to go before they do so. Along the way, they will encounter many challenges. However, if sufficient research is conducted and the appropriate inquiries are posed, an investment in a mining company of this type can still turn out to be profitable.

In light of this, the following is an overview of the various stages that comprise the lifecycle of a mine. Prospecting and exploration come first, followed by evaluation and approval, then construction, production, and finally reclamation.

1. Prospecting and exploration

Prospecting and exploration are necessary steps in the mining and development processes, and they frequently take place concurrently. Historically, prospectors would explore a region on foot with a pick and shovel in order to look for mineral deposits. However, today, exploration companies have access to more high-tech methods that they can use when searching a region for mineral deposits. The period of time spent prospecting can range from one to two years.

During the process of mineral exploration, professionals such as geologists will use a variety of additional methods to ascertain the potential size and value of the mineral deposit that was discovered during prospecting. The process of exploration includes a variety of tasks such as mapping, diamond drilling, and sample collection. Depending on the project, it is estimated that this stage will last anywhere from three to fourteen years. In most cases, it requires the compilation of a mineral resource estimate in addition to the gathering of data for environmental impact studies.

2. Assessment and approval

Following the completion of prospecting and exploration, the details of a deposit, as well as the environmental and socioeconomic data gathered during exploration, are utilized in the process of planning and designing a mine.

Mines are only constructed by companies once they are certain that they have discovered a deposit that is of sufficient value to warrant the expenditure of capital necessary to bring it into production. They will be responsible for covering costs associated with the design and construction of the mine, operational expenses, as well as mine closure and reclamation costs.

Mining companies will typically carry out a number of technical studies in order to ascertain whether or not a mineral deposit can support an economically viable mining operation. These studies consist of prefeasibility studies, feasibility studies, and preliminary economic assessments. The geological, engineering, and economic factors are analysed and evaluated in all three models, but the level of detail and precision in each model is significantly different from the others.

In most cases, the mining industry requires between two and three years to collect all of this information. During this stage of a mine’s lifecycle, companies will typically look to secure various permits, a process that can take anywhere from one to three years or even longer in some cases. They also spend a significant amount of time fundraising in order to finance these hazardous and costly endeavors.

3. Construction

All of the preliminary and technical reports that are finished during the first two stages of the lifecycle of a mine serve as tools that provide businesses with the information they need to make informed and strategic decisions regarding the development of a project. These reports are completed during the first stage of the lifecycle of a mine. When they have gathered all of this information, the next step in the process will be for them to decide whether or not to move forward with the mine construction phase.

After all of the necessary research, permitting, and approvals have been accomplished, construction can begin. The construction of a mine site can include the improvement and construction of roads, mining processing facilities, environmental management systems, employee housing, and other facilities.

4. Production

The production phase of the mine does not begin until after the construction phase has been completed. In order to produce something useful from a mine, first the ore needs to be extracted, then the minerals need to be separated, then the waste needs to be disposed of, and finally the product needs to be.

Depending on the composition of the deposit and the vitality of the market, the production phase, also known as the mine life, may be brief and fruitful or it may stretch on for decades. If the prices of the metal being mined are no longer high enough to justify the costs of production, production might be shelved as an option.

Surface mining and underground mining are the two methods of mining that are used most frequently. The properties of a company’s mineral deposit and the constraints imposed by economics, safety, technological advances, and environmental permitting are taken into consideration when determining the most effective method of mineral extraction to use.

Mine production involves three main stages:

• Processing is the step of the mining process that consists of treating the ore in order to separate the valuable minerals from the waste rock.
• The process of extracting ore from rock using a variety of instruments and machinery is referred to as “recovering minerals.” This process is also known as “mineral extraction.”
• Smelting is the process of obtaining metals such as zinc, copper, or precious metals from their ores by melting the concentrate.

5. Reclamation

The process of closing down a mine begins once all of the resources at the site have been extracted. This stage of the process involves tearing down all of the buildings and infrastructure located on the property. The land is then subjected to reclamation, which puts it on the path to being restored to its previous condition. The duration of this final phase can range anywhere from one year to ten years.

Mining involves the temporary use of land, and when the lifecycle of a mine comes to an end, the objective of reclamation is for areas that have been impacted by mining activity to once again host self-sustaining ecosystems that provide a healthy environment for fish, wildlife, and humans.

Mines are important

Investors can learn about the various stages that go into the successful development of a mine by looking at the life cycle of a mine. It usually takes between 10 and 15 years from the time that geologists begin to prospect in an area until the time that a gold mine begins to actually produce gold for the first time. Estimates range widely, but even optimists believe that less than one percent of mines that start out as prospects will meet the criteria necessary to become operational mines.

Pre-feasibility and feasibility phases

During the pre-feasibility phase, it is determined whether or not a deposit has reasonably robust economic benefits, which are necessary in order to justify the cost of moving on to the next stage of studies. During the feasibility phase, the size, location, and potential value of the ore body are determined. The phases known as “feasibility” and “permitting” will both result in significant cost increases.

Construction

The construction phase is when costs reach their highest point in the project. At this juncture, the amount of money being invested, the rate at which supporting infrastructure is being built, and the number of people being directly employed are most likely to reach their peaks.

However, this may be a time of high dependence on imported capital goods, services, and skills for nations that do not have an established mining sector or skills base.

Production

As the mine begins production, the mining company finally starts to see revenue for the first time after 10–15 years of incurring losses as a result of the mine’s operation. Before the doors can even open, significant funds need to be invested in employee training. The workforce at the mine can finally become established.

Maturity

The local supply chains will reach their peak as the mine matures, and investors will receive a return on their investments as a result. Then, as the mine’s production starts to decrease, often with grades getting lower, more investment will be devoted to preparing for orderly closure, decommissioning, and ongoing management of environmental liabilities. This will occur as the mine’s production begins to decline.

All profitable mines, including those owned by companies with stock symbols such as Goldcorp Inc. (GG), Barrick Gold Corp. (ABX), Newmont Mining Corporation (NEM), Agnico Eagle Mines (AEM), and Yamana Gold (AUY), are required to pass through the stages described above. ETFs that are backed by gold, such as the SPDR Gold Trust (GLD), are one more way to play gold, and ETFs that track the performance of gold miners, such as the Gold Miners Index (GDX), are an excellent way to invest in gold miners without taking on exposure to individual companies.