London Bullion Market Association - London Gold Fixing (10:30 AM and 3:00 PM Local London Time)
CME Group / NYMEX Gold Futures
CME Group / NYMEX E-Mini Gold Futures
NYSE Arca Gold BUGS Index
SPDR Gold Shares GLD Price
Mining Process
The process begins with the exploration of specific geological areas that may be conducive to the formation of gold.
A mining company needs to locate an accessible area that contains gold in 2,000 to 3,000 parts per billion (ppb) to be profitable.
Thus, geological, geophysical and geochemical data is collected to determine the probability of a deposit. If sufficient
data is acceptable then test drill holes are sunk in a predefined area to take sub-surface samples, which are then sent to
a laboratory to determine the eveidence of any gold ore. Gold- bearing material can be classified as:
Placers
Free milling ores
Oxidized ores
Silver-rich ores
Iron sulphides
Arsenic sulphides
Copper sulphides
Antimony sulphides
Tellurides
Carbonaceous
Mines are either open pit surface excavation or deep shaft.
In surface excavation, large drilling rigs bore a pattern of holes into the rock, which is then filled with an explosive
compound. The compound is then ignited in order to fragment the rock into a size that can be loaded and hauled away.
Large masses of rock are excavated, crushed and processed to remove and separate gold particles from the crushed
rock. Some mines specifically excavate for gold or gold is found as a by-product during the excavation for other minerals such as
copper or silver. It is very rare to actually locate gold nuggets that are of 0.900 in fineness (parts per thousand).
Cyanidation is the method of extracting gold and silver contained in ores or concentrates by dissolving them in a weak
solution of potassium or sodium cyanide.
South Africa leads all nations in
total gold production. The next largest production is from the United States (Nevada, Alaska, California and Utah),
Canada and then Australia. Other major producing nations include Russia, China, Indonesia, Peru, Uzbekistan and Papua New Guinea.
Search for a Gold Mining Company
Producers
Argentina
The Alumbrera mine is located in northwest Argentina.
The Gualcamayo mine is located in the northern San Juan province of Argentina.
The Veladero mine (open pit) is located in in San Juan Province (Frontera District at the border with Chile).
Australia
The Kalgoorlie Consolidated gold mine (Barrick Gold Corp., Newmont Mining Corp.) is located in Western Australia
Kalgoorlie operations consist primarily of the Super Pit open-pit mine, which is located along the Golden Mile ore bodies
previously mined from underground.
Google Map Location of the Kalgoorlie Consolidated Field
The second largest gold mine in Australia is the Callie underground gold mine (Newmont Mining Corp.) located in the
Tanami Desert, Northern Territory.
Google Map Location of the Callie / Tanami Field
Dioro operates the Frog's Leg project, which is located approximately 25km west of Kalgoorlie, and the South Kal Project,
which is located approximately 25km south of Kalgoorlie.
Gold is also mined in the Boddington area of Western Australia.
Brazil
Gold is mined in the area of Sierra Grande, Brasil Mineracao.
The São Francisco (Yamana Gold) gold mine is located within the Guapore Gold Belt. The São Vicente mine, also
owned by Yamana Gold is located near by.
Fazenda Brasileiro (Yamana Gold) is an underground gold mine located in northeast Brazil, 180 kilometres north northwest of the state capital of Salvador.
The Jacobina complex of underground mines (Yamana Gold) is located in the state of Bahia, in north eastern Brazil near the Serra do Jacobina mountains.
Canada
Agnico-Eagle Mines Ltd. operates the LaRonde Mine in Quebec.
Ghana
Gold is mined in the interior of the country. It has been reported in the media that Ghana contains the second largest
area of gold deposits in the African region after South Africa. Anglo Gold Ashanti operates the Iduapriem mine. Newmont
operates the Ahafo mine. The Parliament of Ghana voted to increase the mining royalty to 5.0% from the existing 3.0%,
and has indicated that it wants to renegotiate existing contracts.
Indonesia
Gold is mined as a byproduct of the copper mines at Grassberg and at Batu Hijau (southwest cost of the Nusa Tenggara
Barat peninsula; Newmont Mining Corp.).
Google Map Location of the Batu Hijau Field
Japan
Sumitomo Metal Mining Co., Ltd. operates the Hishikari Mine in Kagoshima Prefecture.
Mali
Gold is mined at the Morila deposit in southern Mali, and the Yalea deposit at Loulo in western Mali.
Mexico
Gold is mined (as a byproduct of silver mining) at Palmarejo.
Papua New Guinea
Harmony Gold Mining Co. operates the Wafi-Golpu mine.
Peru
Gold is mined at Minera Yanacocha, which is located approximately 375 miles (603 km) north of Lima in the Andes Mountains
in the Province of Cajamarca.
The Cerro Corona mine (copper / gold, open pit) is located in norther Peru in the Andes Mountains.
Russia
Gold is mined at Veduga, Anenskoye, Sovromenine, Aprelkovskoye. In the far northeast of Russia, Kupol deposit is located
in the northwest part of the Anadyr foothills on the boundary between the Anadyr and Bilibino Regions in the Chukotka
Autonomous Okrug.
South Africa
Gold Fields Ltd. operates the Driefontein mine in South Africa.
Harmony Gold Mining Company Ltd. maintains operations located on the Witwatersrand Basin.
Gold is mined in the Vaal River (Great Noligwa, Kopanang, Moab Khotsong and Tau Lekoa) and West Wits regions.
The Vaal River area is located just west of the towns of Klerksdorp and Orkney, and operations are along both sides of the
river in the Free State and the Northwest State. The two important geological formations are the the Vaal Reef and the
secondary Crystalkop Reef.
Google Map Location of Vaal River Field
United States
Gold is mined in the states of Alaska, Nevada, Arizona, Montana, California, Utah and Colorado.
In Nevada, Barrick Gold Corp. owns the Goldstrike operations, which includes the Betze-Post open pit and the Meikle and
Rodeo underground mines along the Carlin Trend near Elko.
Google Map Location of the Goldstrike Field
Apollo Gold Corp. operates the open pit Montana Tunnels Mine, which is a 50% joint venture with Elkhorn Tunnels, LLC, in Montana.
A second well developed gold mining area in Nevada is the Battle Mountain complex.
Google Map Location of the Battle Mountain Field
Coeur D'Alene Mines Corp. operates the Rochester Mine just outside of Lovelock, Nevada.
Google Map Location of the Rochester Mine Field
Gold Refining
Mines will perform some preliminary refining in order to produce ingots that can be transported to a professional
Assayer and refiner. These semi-refined ingots are known as Doré, and contain gold, silver and other trace
minerals.
Further refining is conducted in order to remove trace minerals. The refined gold must be assayed (independently
evaluated) to determine that the purity of the gold is of a suitable quality to be termed "good delivery".
The Italian-speaking region of southern Switzerland (Ticino) is one of the most well know areas for companies
performing assaying and the final refining of unrefined gold. The Central Office for Precious Metals Control, Federal Customs
Administration, maintains oversight of the industry in Switzerland. In Switzerland, precious metals articles must bear the
mark for a standard of fineness and a responsibility mark (assigned to each company in the industry) registered at the
Central Office for Precious Metals Control. Some of the local companies include, Argor-Heraeus, PAMP (Produits Artistiques de Métaux Précieux;
MKS Finance), Valcambi SA.
Bars must be at least 99.5% (Purity is usually expressed in parts per thousand as 0.995, 99.99, 999.9 or 0.999; it is very
difficult to refine out the last few impurities thus gold is never expressed in 100% terms) pure gold and weigh between
350 and 430 troy ounces to qualify as "London good delivery bar" in most international transactions.
The color of the gold bars will indicate the age of the bar and the impurities in the bar associated with the
proficiency level of smelting during the era that the gold was produced:
A reddish tinge indicates the presence of copper, which reflects bars produced from gold sources of melted coins and jewelry
and indicates older bars.
Butter yellow colored bars indicate bars that were produced by up-to-date smelters and from gold sources of below ground ore.
A white tinge to the gold bars indicates the presence of silver and platinum from older smelters and gold sources of below ground ore.
A greenish tinge indicates the presence of iron.
An unusual form of gold has a black tinge, which indicates the presence of bismuth.
Bars occasionally become dented due to handing (especially older bars that have been physically shipped several
times) however this does not detract from the value of the bar. Similarly, bars will sometimes appear to have notches
on the edge however these are chips removed for assay purposes and does not detract from the value of the bar.
Every bar will have the stamp indicating the smelter where the gold was refined as well as to where it was cast.
Additional identification marks will identify its purity and "melt" (how many bars were produced in that specific pouring;
If there is insufficient molten gold left at the end of the pouring to produce a single minimum 350 troy ounce bar then a series of smaller weight bars are produced as
molten gold from one melt is prohibited from being added to a successive melt).
A Certified Stock is physical gold that has been inspected and found to be of a quality deliverable against
futures contracts, stored at the delivery points and designated as regular or acceptable for delivery by the
commodity exchange
The main bar weight traded in Europe is a Kilo Bar, which has several different weights depending on
the assayed fineness of the gold:
0.995 fine gold kilo Bar comprises 32.1507 troy ounces
0.999 fine gold kilo Bar comprises 32.119 troy ounces
0.9999 fine gold kilo Bar comprises 32.148 troy ounces
A troy ounce is 31.1048079 grams and an avoirdupois ounce is 28.35 grams.
A troy ounce contains 480 grains and an avoirdúpois ounce contains 437.5 grains.
A standard international London Good Delivery 400 troy ounce bar weighs 438.8 avoirdupois ounces or
27.4 avoirdúpois pounds, approximate dimensions are 7 x 3-5/8 x 1-3/4 inches (since 1986, most 400 troy ounce bars
have been cast trapezoidal, and have either rounded corners or sharp corners), and based on the statutory price of USD$42.2222 per ounce
the value of a 400 troy ounce bar is $USD16,888.00
In the Far East gold is weighed in Taels (one tael equals 1.203 troy ounces), and the unit of trading is 100 taels
(123.04 ounces) which is usually quoted in Hong Kong dollars.
On the Indian subcontinent gold is weighed in Ten Tola bars (10 Tola = 3.75 ounces;
One tola equals .375 ounces or 11.1 grammes of 0.999 fineness).
There is a spot (cash) price for gold and a futures contract price for gold.
The price of gold was allowed to float in 1968. The price of gold is quoted in terms of troy ounces (one troy ounce
equals 31.1 grams). The statutory rate of a troy ounce of gold is $42.2222.
In the United States, Gold futures contracts are quoted and traded on the COMEX division of the CME Group member
exchange New York Mercantile Exchange / NYMEX (open outcry / pit trading); CME Globex (electronic trading platform);
CME ClearPort (traded off-exchange for clearing only). This is a benchmark contract (sets the price for this specific resource worldwide).
Product Symbol GC
Contract size is for good delivery 100 troy ounces (5% more or less) in one bar or three one-kilogram bars, minimum
.995 fine; The bars must be stamped with the mark that clearly
identifies weight, fineness, bar number/serial number and identifying stamp of the refiner
Price is quoted in U.S. dollars per troy ounce
Minimum Fluctuation $0.10 per troy ounce
Termination of Trading Trading terminates on the third last business day of the delivery month
NYMEX Open Outcry trading hours: Monday – Friday 9:00 AM to 2:30 PM (8:00 AM to 1:30 PM CT)
CME Globex trading hours: Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a
45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT)
CME ClearPort trading hours: Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a
45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT)
Listed Contracts Trading is conducted for delivery during the current calendar month; the next two calendar months; any
February, April, August, and October falling within a 23-month period; and any June and December falling within a 60-month
period beginning with the current month.
Settlement Type: Physical delivery; Delivery may take place on any business day beginning on the first business day of
the delivery month or any subsequent business day of the delivery month, but not later than the last business day of the
current delivery month.
OutrightRates Performance Bond Requirements: speculator initial $4,500; maintenance $3,333
London Fixing
London Bullion Market Association - London Gold Fixing (10:30 AM and 3:00 PM Local London Time)
Every day at 10:30 a.m. and 3:00 p.m. local London time, the five bullion trading houses "fix" the price of gold
which becomes the benchmark for the entire gold market. At the start of each fixing, the Chairman announces an opening
price to the other 4 members who relay this price to their customers. The reason why London endures in this role is the presence of the Bank
of England which has a long history of direct dealing and marketing of gold into international markets on the behalf of
customer countries (the U.S. Federal Reserve Bank does not do this).
The five fixing market makers are Barclays Capital, Bank of Nova Scotia-Scotia Mocatta, Deutsche
Bank AG London, HSBC Bank, and Société Générale
The international market is also known as the "loco London market" due to the fact that gold is quoted for
delivery in London.
Contango: near futures prices exceed spot prices; the premium paid for futures over spot prices.
Gold Lease Rate: Libor minus the contango.
After being prohibited for several decades, on December 31, 1974, it
again became legal for U.S. citizens to own gold. Gold is used as an investment or inflation hedge by individuals,
companies, financial institutions, national treasuries and investment funds.
Gold is either purchased on an exchange (cleared contract) or OTC between a bank / broker / client.
Bullion trade / transactions require that parties utilize the 1997 ISDA Bullion Definitions and the 1993 ISDA Commodity
Definitions, as amended by the 2000 Supplement to the 1993 ISDA Commodity Definitions documentation.
Gold Usage
The largest usage of gold is in jewelry fabrication (approximately 80% of annual world production) and
consumption (India, United states, European Union, China, Saudi Arabia, Eqypt, Turkey, Italy). The
balance of gold is used as a storage of value, and as a component in manufacturing electronics, telecommunications
equipment, laser and optical equipment, aviation, and medical / health.
In India (and in Indian communities around the world), those who participate in the Hindu festivals of Dhanteras and
Diwali have traditionally purchased gold jewelry as part of the festival observance (occurs in the late Fall / October).
Weight / Fineness
Both the troy system and avoirdúpois system are British standards of measurement. Avoirdúpois is derived from the
French term "avoir du pois", or goods of weight, and the troy system takes its name from a city in France where it
originated (Tries).
Gross Weight
Fine gold content in ounces troy
Bars of 995.0 assay
Bars of 999.0 assay
Bars of 999.9 assay
1 Kilo
31.990
32.119
32.148
½ Kilo
15.995
16.059
16.074
¼ Kilo
7.998
8.030
8.037
200 grams
6.398
6.424
6.430
100 grams
3.199
3.212
3.215
50 grams
1.600
1.607
1.608
20 grams
0.640
0.643
0.643
10 grams
0.321
0.322
0.322
5 grams
0.161
0.161
0.161
100 ounces
99.500
99.900
99.990
50 ounces
49.750
49.950
49.995
25 ounces
24.875
24.975
24.998
10 ounces
9.950
9.990
9.999
5 ounces
4.975
4.995
5.000
1 ounce
0.995
0.999
1.000
10 tolas
3.731
3.746
3.750
5 taels
5.987
6.011
6.017
Source: London Bullion Market Association
To convert this:
To this:
Multiply by:
One grain
Grams
.0647989
One gram
Grains
15.4323584
One gram
Kilograms
.001
One kilogram
Grams
1,000
Long Ton
Kilograms
1,016.05
Metric Ton
Kilograms
1,000
Short Ton
Kilograms
907.2
One gram
Ounces
.03527
One ounce
Grams
28.3495231
One ounce
Grains
437.5
One troy ounce
Grams
31.1034768
One troy ounce
Grains
480
One ounce
Kilograms
.0283495
One troy ounce
Kilograms
.0311034768
One pound
Kilograms
.4535924
One kilogram
Pounds
2.2046226
Gold Weight Conversion Calculator:
Enter an amount in any box to calculate the equivalent weight.
Gold Loan:
Instead of buying gold, a jeweler will borrow gold for the duration of the fabrication process. Only when the
jeweler sells the finished product at a price related to the spot rate (and the value added) at that time will the jeweler
actually buy gold from the bullion trader. Jewelers thus simultaneously hedge their price risk and finance their stock at
an interest rate below normal borrowing costs.
An exploration company finds gold and needs to borrow to set up a mine. Instead of borrowing from a bank, the
company borrows gold (at a lower interest carrying rate). It sells that gold in the spot market and uses the cash to set
up the mine. It will borrow only what it takes to set up the mine and based on how much ounces/tonnage it may extract. As
the mine extracts the gold from the ground it pays back the borrowed gold.
Lease rate is determined for borrowing the gold, which includes and interest rate (360-day basis) and carrying charges,
which are costs incurred in warehousing the physical commodity such as insurance and storage.
Central Bank Holdings (Official Gold Reserves)
The largest offical gold reserves (above ground) include:
United States (8,133.5 metric tons)
Germany (3,408.3 metric tons)
International Monetary Fund (3,217.3 metric tons)
Italy (2,451.8 metric tons)
France (2,445.1 metric tons)
People's Republic of China (1,054.0 metric tons)
Switzerland (1,040.1 metric tons)
Japan (765.2 metric tons)
Netherlands (612.5 metric tons)
Rusia (568.4 metric tons)
European Central Bank (501.4 metric tons)
Source: World Gold Council; September 2009
The combined holdings of these parties account for approximately 24,197.5 metric tons / 81.7% of total (above ground)
gold reserves (29,633.9 metric tons) at September 30, 2009. In November 2009, India purchased 200 metric tons from the IMF.
The Central Bank Gold Agreement of 1999 (renewed March 2004) requires that the 15 largest government and supranational
gold owners restrict their sales into the market at a pace that would not cause substantial disruption of the price (presently
a combined maximum of 500 tons per annum for the next five years).
In the United States, the bulk of United States' gold reserves is stored under security at the Fort Knox Bullion
Depository. The balance of any official United States' gold reserves are held in the Philadelphia Mint, the Denver Mint,
the West Point Bullion Depository and the San Francisco Assay Office. The Federal Reserve Bank of New York also has an
extensive gold storage vault, however this is primarily allocated storage for second parties and not U.S. gold
reserves. The main vault of the New York Federal Reserve opened September 1924, and the Fed does not charge for the
storage service but does charge a nominal handling fee for shipping gold in / out of the vault.
Gold Industry and the Gold Commodity Market Information Resources
London Bullion Market Association - London Gold Fixing (10:30 AM and 3:00 PM Local London Time)
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Google Map Location of the Kalgoorlie Consolidated Field
