Precious Metals Production and Development
Producers poised for growth amid market shifts
The United States’ role in the precious metals space remains golden. The country houses the largest gold producing complex in the world at Nevada Gold Mines and ranks fifth in gold production volume. In 2023, the country produced 170 metric tons, according to the USGS. For silver, the country ranked ninth globally in 2023 and produced 1,000 t of the metal, according to the USGS. Silver was produced at only four primary silver mines, and as a byproduct of 31 others.
Gold production and development
Rare is the day over recent months when headlines do not read “gold price reaches record high.” 2024 will be remembered as a golden year, as the yellow metal grew 35.1% in dollar value YTD, outperforming most asset classes. Gold has long been a haven asset, with 2024 feeding into this role, highlighted Jason Kosec, president and CEO of Integra Resources: “The ongoing bull run in gold prices, driven by factors such as massive Western debt and de-dollarization narratives, reflects its importance as a haven amid global uncertainties, including wars and climate crises.”
The yellow metal bull run does not seem like it will back down. The Congressional Budget Office estimates US debt held by the public as a share of GDP will reach the highest level on record by 2029, increasing further to 180.6% as a share of GDP in 2053. High interest rates and inflation further support gold’s rise. Central banks align with a global dedollarization trend; gold holdings are at 10%, up from 3% a decade ago. President Donald Trump and other advanced economies are prioritizing fiscal expansion, as spending commitments are forecasted to rise and as countries adapt to and tackle climate change along with other factors. This environment solidifies gold’s position as a haven asset. Bank of America forecasted gold could reach levels of US$3,000/oz as early as 2025.
Although the high gold price presents opportunity, producers must continue to be disciplined, underscored Henri Gonin, managing director of Nevada Gold Mines (NGM), the joint venture between the world’s top two gold producing companies, Barrick and Newmont: “The challenge is how we react to these increased prices. Operations that previously did not meet our financial thresholds now appear more attractive, but chasing every ounce can drive up costs. Sustainable growth requires balancing short-term gains with a focus on maintaining efficiency and profitability over time.”
For NGM, sustainable growth comes in the form of ramped up production at Goldrush, which came online in April 2024, and exploration at the Greater Leeville and Robertson areas. The Fourmile project, wholly owned by Barrick, will add to NGM’s Cortez complex’s growth. “Intensive drilling and testing identified four primary zones within the deposit, revealing high-grade mineralization that positions Fourmile as a potential Tier One mine, with production estimates exceeding 500,000 oz/y over more than two decades,” continued Gonin.
The path to successful production in the gold sector requires navigating high barriers to entry, adapting to shifting economic trends, and anticipating the evolving pricing dynamics that increasingly reflect global, rather than Western, market forces. Benefitting from the current cost environment required a long-term view, reflected John Swallow, president and CEO of Idaho Strategic Resources: “We considered global trends like deglobalization, de-dollarization and interest rate cycles when building our company with the idea that good companies are built during tough times. With our workforce in place, land secured, and exploration and production ramping up, we are in a strong position.”
Gold dynamics create an environment ripe for M&A, enabling Toronto-based firms Andean Precious Metals and Minera Alamos to diversify into the US, acquiring Golden Queen Mining and Sabre Gold respectively. Alberto Morales, founder, executive chairman and CEO of Andean Precious Metals, explained: “As interest rates decline, interest in riskier assets, including precious metals, is likely to increase. A disconnect exists between the value of mining companies' equities and the rising spot prices of commodities, creating opportunities for companies like Andean to acquire undervalued producing assets.”
For junior companies, on the other hand, mergers can be used as a hedge against difficult capital markets, said Kosec of Integra, that merged with Florida Canyon Gold in July: “The merger will reduce our reliance on frequent capital raises, as the cash flow from Florida Canyon is expected to support costs for our key development stage projects DeLamar and Nevada North.”
However, the industry continues to extract without replacing reserves. In an interview with the Northern Miner, Mark Bristow, CEO of Barrick gold, emphasized how the industry must “reinvest in its own future, not just rely on M&A.”
One such investment includes U.S. Gold Corp’s CK gold project in Wyoming, where construction is set to begin in 2025. The firm’s CEO George Bee said: “Our permitted status positions us favorably to capitalize on these market conditions, particularly as gold producers struggle to maintain production levels amidst increasing all-in sustaining costs from older producing assets.”
Silver production
The silver market, like gold, is poised for a sustained bull run. Silver is uniquely positioned as both a precious metal and an industrial component, making it an attractive asset in today's economic environment, especially given its critical role in green technologies.
The Silver Institute estimates that silver demand in the photovoltaic industry alone will exceed 140 million oz/y by 2030. “2023 saw nearly 500 gigawatts (GW) of new photovoltaic installations globally, and experts predict this will increase. Each GW requires nearly 500,000 oz of silver, which could result in more demand for silver than total global annual supply,” said Mitchell Krebs, president and CEO of Coeur Mining.
2024’s US$1.7 billion acquisition of SilverCrest Metals will help Coeur Mining fill the world’s supply gap. “The addition of SilverCrest’s high-grade Las Chispas silver operation positions Coeur as a global leader in the silver industry, with peer leading expected production of over 21 million ounces of silver”, highlighted Krebs.
This production will complement production from Coeur’s expanded Rochester operation. “We expect double digit increases for silver, primarily due to Rochester’s expansion. For 2024, silver production is projected to be between 10.7 million and 13.3 million oz,” Krebs added.
Polymetallic ore deposits account for more than two-thirds of US and world resources of silver, according to the USGS. As such, the importance of verified sources of silver increases. “It is not easy to find—often only as a byproduct in certain locations—and its rarity is becoming more apparent. Now is the time to recognize the importance of silver and prioritize its discovery and development,” said Catherine Boggs, Chairperson of Hecla Mining Company. Hecla Mining named Rob Krcmarov as CEO, effective November 2024.
The firm’s flagship asset, Greens Creek in Alaska, produced between 8.8-9.2 million oz in 2024. “The firm is focused on expanding and converting resources to upgrade multiple ore zones. When Greens Creek began operations in 1989, it had a seven-year reserve life. Now, the mine boasts a 13-year reserve life. This achievement is a testament to the success of our exploration teams in continuously converting resources into reserves,” said Boggs.
As high gold prices present opportunities, American producers are careful to maintain sustainable growth, prioritizing operational efficiency over short-term gains. Silver’s dual demand in both industry and investment strengthens its role as a critical asset in a world increasingly driven by clean energy needs. Whether through exploration, expansion or strategic acquisitions, the industry is preparing for a sustained bull market in precious metals. This disciplined approach, focused on both production and reserve sustainability, ensures the US remains resilient in the face of global market fluctuations, supporting its role in the future of precious metals production.
Article header image courtesy of Rio Tinto Kennecott