Petaquilla Info: Buying gold mining shares is widely seen as a way of gaining exposure to movements in the gold price
Gold is extremely rare. According to geological experience essentially all gold is found only in low concentrations in rocks.
Gold is rarer even than platinum, although because of platinum’s more even dispersion in the Earth’s crust it is actually harder to find commercial deposits of platinum.
Gold is more frequently deposited in the concentrations which make gold mining viable.
Gold’s average concentration in the Earth’s crust is 0.005 parts per million. The technology of extraction is expensive primarily because the process always requires gold mining companies to manipulate large physical quantities of ore for small results. The energy required to heave, grind and process ore is itself valuable, as are the chemicals used in the process, and this places a lower limit on the quality of ore which can be profitably worked in the gold mining process.
At different points concentration of minerals within the earth’s crust varies from their average, and it is those variations which produce workable ores for gold mining. Iron, for example, accounts for an average 5.8% of the content of the Earth’s crust. It needs to be concentrated by natural variations to about 30% to be considered an ore, indicating a required geological concentration of about 5 times. A lower grade gold ore would contain something like 5 grams per tonne (5 parts per million). So gold ore needs to be concentrated by about 1,000 times above its average dispersion to become viable for gold mining.
The process of gold concentration happens both above and below the surface of the Earth. On the surface there is alluvial gold which has been concentrated by the effects of running water, usually rivers. Because of its extreme density metallic gold will readily fall out of suspension as water slows down. So where a river cuts through gold bearing rock, and then slows down as it hits a flatter/wider river bed, gold will concentrate in a ‘placer’ deposit, allowing extraction of gold particles by panning and the modern day industrial gold mining equivalents
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