Gold Production and Exploration
Copper’s Chilean little brother is growing up
In Chile, gold is often considered to be copper’s little brother. Chile is the world’s 21st largest producer of the metal, accounting for 1.2% of global production. However, gold production in the country is up 20% since 2021, and the industry has been advancing rapidly. 2023 and 2024 have seen important developments pointing towards a golden future, especially given the backdrop of historically high gold prices.
Gold prices reached US$2,450/oz in May 2024, following a period of growth starting in February 2024. The factors behind the price jumps were complex. Global conflicts in the Middle East and Ukraine, concerns over a weakening dollar, inflation, and the potential for interest rate cuts all feed into the price highs. In January-September last year, gold holdings in central banks increased 62% year-on-year, and investments in global exchange-traded gold funds doubled, according to the US Geological Survey. There has been significant central bank buying from countries like China, Turkey and Russia, which supports gold prices as they rebalance their exposures away from the US dollar.
Although copper and lithium receive the press for the world’s sustainability targets, gold cannot be overlooked. Renewable energy technologies such as solar panels and fuel cells incorporate gold for improved efficiency, for example. “The challenge of humanity to develop technology to live more sustainably not only requires metals like copper and lithium, but also gold. The use of gold in technology has become increasingly important,” said Rodrigo Moscoso, general manager at Kinross Chile.
“Gold Fields recently commissioned the Salares Norte project, about 190 km northeast of us. It will produce between 300,000 to 350,000 oz/y. They saw potential in our district scale land position and the first Intrusive Related Gold System discovery in Chile and increased their stake to 18.9%.”
Geoff McNamara, Co-Founder, Tesoro Gold
Production
One of Chile’s few greenfield projects came online in 2024, when Gold Fields’ Salares Norte poured first gold in March. The mine is projected to produce 350,000 oz/y gold equivalent. The project took 23 years to develop from the exploration to production and cost US$1.2 billion. However, the miner was forced to readjust production guidance following abnormally cold weather at the operation, hinting at the effects of the changing climate on Chile’s mines.
Another miner in Chile’s Atacama views Chile’s gold mining potential with great optimism. Canadian miner Kinross raised its annual global gold production by 10% last year, largely due to contributions from La Coipa. Production at La Coipa rose nearly 60% year-on-year from 2022-2023 to 260,138 oz/y. The area also has more to give, according to Moscoso: “La Coipa oxide extensions show promising opportunities to extend mine life to the end of the decade. We conducted three years of engineering studies to improve knowledge of the ore bodies through geology, geometallurgy, and geotechnical studies. In parallel, we are conducting environmental studies.”
The firm’s portfolio also includes the Lobo-Marte, a project located approximately 50 km from La Coipa, which is slated for construction in 2025. The operation is expected to contribute an estimated 293,750 oz/y to production.
In March 2023, Pan American Silver acquired Yamana Gold’s assets in Chile, which included producing mines El Peñon and Minera Florida. Following the acquisition in the period from March to December 2023, gold production reached 95,700 oz and 72,400 oz at El Peñon and Minera Florida respectively.
“The geological endowment in Chile offers significant potential for precious metal deposits, due to limited exploration. This untapped opportunity is rare and often found in remote locations.”
Brian Miller, CEO, Astra Exploration
Exploration
Chile's geology is exceptionally favorable for gold mining owing to its dynamic tectonic and volcanic history, which has created a rich tapestry of mineral deposits. Chile has three geological belts: the Andes with epithermal gold and silver, the Atacama fault zone with IOCG deposits, and the coastal cordillera.
The Andean orogeny and extensive volcanic activity have led to the formation of significant hydrothermal systems, epithermal deposits, and porphyry copper-gold systems, particularly in volcanic belts like Maricunga and El Indio. Key fault systems, such as the Domeyko Fault, have further facilitated gold mineralization by providing pathways for mineral-rich fluids.
Junior miner Tesoro Gold discovered the country’s first Intrusive Related Gold System. Neighboring Gold Fields saw the potential of the system, increasing its stake in the company to 18.9%. Currently the project has an unconstrained resource at Ternera of 1.5 million oz. Ternera is the firm’s most advanced deposit within their larger 20 km long El Zorro project, and is the company’s focus: “Our short-term goal is to grow the resource base to 2 million oz and eventually 3 million oz, expanding the open pit and processing plant to produce 100,000 to 150,000 oz/y for over a decade,” said Geoff McNamara, the company’s co-founder.
Chile’s dynamic geology, rich in diverse mineral deposits, continues to attract substantial interest and investment, highlighting the untapped potential within its borders. As global economic and geopolitical factors push gold prices to new heights, Chile's gold sector is poised to play an increasingly important role within the country’s economy.
Article header image courtesy of Torq Resources