WGC Expert Skeptical About Mammoth Chinese Gold Discovery

SEATTLE (Scrap Monster): John Reade, senior market strategist at the World Gold Council (WGC), in a note, said that the world gold trade body remains skeptical about the announcement of a recent discovery of an $83 billion gold deposit in the southeastern province of Hunan, China.

Under the Wangu gold field in Pingjiang county, the Hunan Province Geological Bureau claimed to have discovered about 1,000 tonnes of gold (35.2 million ounces). Within 2,000 meters of the surface, 300 tons (10.5 million ounces of gold) have already been found, Bureau officials said. The 32 million oz. value was calculated by extrapolating total resources at a depth of 3,000 meters.

As stated, the 1,000-ton prospective resource sounds aspirational, according to Reade. Although the 300-ton number seems more realistic, further drilling is required to make this a reserve. Furthermore, as it only makes up about 1% of the entire supply, the new discovery will not have much of an influence.

Deposits at depths of 2,000 to 3,000 meters are uncommon and challenging to develop, according to the WGC strategist. Putting such deposits into production would take years. Extreme heat, seismic hazards, and exorbitant expenses are just a few of the difficulties that come with operating at such depths.

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