Falling Gold Production: Collective Mining (TSXV:CNL) Could Make Up for Decline

The world's leading gold producers are facing a huge problem: their production is falling. This means that they will need to find new sources of the precious metal in order to meet demand and maintain their profitability. While some major producers have good projects from explorers, many don't and will be looking for partnerships with other companies in order to fill this gap.

Canada-based Collective Mining (TSXV:CNL) is developing the Guayabales and San Antonio projects in the Caldas Department of Colombia. The company was listed on the TSX Venture Exchange on May 28, 2021 through an RTO, and has gone on to achieve a number of successful exploration goals at both projects. This year, the company will develop its project further, accelerating its timeline thanks to the encouraging drill results at both sites so far.

January 2022 will see a deep penetrating ground IP survey begin at San Antonio. Once the survey is completed, Collective plans to begin the follow-up drill program at the Pound target, and may test the COP target at the same time. This is all part of a 20,000+ metre diamond drilling program that has investors excited for what's to come in 2022.

If 2021's run of discoveries was a hint at the possibilities of the company's projects, then 2022 could see further high-grade discoveries the likes of which the market is waiting for.

This is critical at a moment when gold production has been falling, and some of the biggest producers in the world are struggling to keep up with their own targets.

Producers like Barrick Gold, Newmont and AngloGold Ashanti have all seen their production fall in recent years. In order to combat this, these producers are looking for new sources of gold, and partnering or acquiring junior mining companies with the right projects is one way to do that.

According to the Australian Government's Department of Industry, Science, Energy and Resources (DISER), there was a 3.9% decline in production in 2020, which rebounded in 2021. This is expected to continue in 2022 with a rebound of 3%, and in 2023 with another 2% increase in output. However, DISER notes that in 2024, gold production is projected to decline by an annual rate of 0.8% in 2025 and 2026. This is due to a number of factors, including the depletion of high-grade deposits and a slowdown in exploration. As ore grades decline and operational costs increase, the market for gold will become increasingly competitive.

This is where juniors with good projects come into play. Major producers can't afford to miss out on these projects, as they could be the difference between meeting and falling short of production goals. At a time when gold production is declining, it's more important than ever for major producers to partner or acquire juniors with high-quality assets.

Fortunately, there are still a number of good projects out there that could help fill this gap. Major producers just need to look for them. Collective Mining has two world-class projects that could be potential takeover targets as major gold mining companies look to secure production for the coming years. Collective could have the project to balance out a major's output deficit, and return further value to shareholders on all sides of the transaction.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes