➤ No major gold discoveries are expected in the near future.
➤ Consolidation of gold majors is reducing competition for juniors' projects.
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Eric Saderholm, president of American Pacific Mining. Source: American Pacific Mining Corp. |
American Pacific Mining Corp. is an explorer and developer of base metals and precious metals that focuses on the Western US. The company has partnered with various large companies to develop many of its assets. One of American Pacific's top assets is the Palmer volcanic massive sulfide project in Alaska, which is a joint venture with Dowa Holdings Co. Ltd. subsidiary Dowa Metals & Mining Co. Ltd., and the company has partnered with a Rio Tinto Group subsidiary on the Madison copper-gold project in Montana. American Pacific is also exploring for gold and silver at the early-stage Gooseberry and Tuscarora projects in Nevada.
S&P Global Commodity Insights spoke with American Pacific President Eric Saderholm and CEO Warwick Smith about gold mining in the western US, the state of industry exploration and recent consolidation among major mining companies. This interview has been edited for clarity and length.
S&P Global Commodity Insights:
Eric Saderholm:
A lot of your [gold reserves] making a lot of money, regardless of the gold price, over the last 40 years have been mined out. Supply is not going to go up this year and production has gone down roughly 2% to 3% over the last decade. So regardless of the fact that the gold price went up so substantially, production levels have not met that increased price.
There are a whole lot of reasons why you just don't see a big discovery happening unless it's in some place where you're going to have a problem geopolitically. I mean, there are lots of good ore bodies out there, but you just can't get to them for one reason or another.
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Warwick Smith, CEO of American Pacific Mining. Source: American Pacific Mining Corp. |
Warwick Smith
Is there a gold price where miners are willing to try to overcome some of those challenges that might push them into more difficult jurisdictions?
Smith:
Can you tell me more about the advantages and challenges of operating in the Western US?
Smith:
One of the reasons that we like to be in the Western US is we understand the permitting. We understand the geopolitical environment. Well, we know that the challenges can change every four years from going to being Democratic to Republican. But we've worked under Obama, we've worked under Trump, we've worked under Biden, and we've been able to handle those challenges quite well. The second thing that I think we've done well, and that's worked for us in the Western US, is we can consistently bring in majors as partners.
Saderholm:
Is there anything in terms of regulation or policy that you think would help make it easier to mine more in the United States?
Saderholm
We've seen some consolidation among major gold mining companies lately. How is that impacting juniors and other gold miners?
Smith
I think the majors, as they get bigger, they get in a lot of ways more bureaucratic and more difficult for us to transact with, to be completely honest.
Typically when you get in [discussions], particularly when you get to large companies that merge, there's so much redundancy and what have you in there that it takes time for it to smooth out. So you know, as a junior, you go from, "Okay, well, I'm dealing with Bob at XYZ company" ... [to] now there's Bob, and there's Jim in the same seat, and who's going to move.
Even if you end up with Bob, [you're] still in the middle of a merger. There's a period there where trying to get anything done —
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