There is not much doubt that Nevada is the Nation's leading state in gold production for the eighth straight year. Preliminary U.S. Bureau of Mines figures indicate that 1988 gold production in Nevada was 3.62 million troy ounces. This is an increase of 35% over the 2.68 million ounces produced in 1987, and a 72% increase over the 2.10 million ounces produced in 1986. Total gold dollar value for 1988 production amounted to $1.59 billion, or an average realized gold price of $439 per ounce.
The short-term outlook for gold exploration and production is bright. Gold prices dropped slightly in 1987 but monthly averages stayed above $400 per ounce. Seven new gold mines came into production in 1988, and it appears that another eleven or so new gold mines will be starting up in 1989. These new mines are in addition to the expansion programs that are ongoing at all of Nevada's larger gold mines.
The number of companies doing exploration in Nevada is conservatively estimated at 500, at least half of which are Canadian. Exploration budgets of these companies vary from a few tens of thousands of dollars per year to several million dollars per year. If an average exploration budget of $500,000 per year per company is assumed, the annual expenditure for gold exploration in Nevada is about $250 million.
Looking at silver, there has been some talk the past two to three years that Nevada should be called the "Gold State" instead of the Silver State. NOT SO. If one looks at the number of ounces of silver produced compared to the number of ounces of gold produced--NOT the dollar value produced by the two commodities--it is readily apparent that there is 4-1/2 times more silver produced in Nevada than gold; the silver to gold production ratios for 1987 and 1988 are 4.55:1 and 4.56:1. In terms of ounces found, more silver has been discovered as a result of the current gold boom than gold.
At this time it appears that Nevada will be the number one silver producing state for the second year in a row. Preliminary production figures, released by the U.S. Bureau of Mines, indicate that 16.5 million ounces of silver was produced in Nevada in 1988, an increase of 35% over the 12.2 million ounces produced in 1987 and an Increase of 158% over the 6.4 million ounces produced in 1986. Dollar value of silver produced in 1988 amounted to $108.2 million, or an average realized price of $6.55 per ounce.
Only one silver mine, the Trinity mine in Pershing County, started in 1988. The Trinity silver project is a joint-venture between Santa Fe Pacific Mining Inc. and U.S. Borax and Chemical Corp Mining of the 1.05 million tons of silver oxide ore at the property was completed during 1988, but production from the heap-leach operation will continue for one to two more years.
Preliminary U.S. Bureau of Mines statistics indicate that Nevada's total nonfuel mineral production in 1988 was $1.87 billion, 85% of which was gold and 6% of which was silver. Only three other metals, mercury, molybdenum and copper, had any activity associated with them in Nevada in 1988. Placer Dome U.S. Inc. reopened the McDermitt mercury mine and plant in March. No announced production figures are available but it is estimated that the mine produced between 10,000 and 15,000 flasks of mercury during 1988.
Cyprus Minerals Co. purchased the Hall molybdenum mine and mill from ARCO Coal Co. in 1988 and resumed operations there during the fourth quarter of the year. The mine has the capacity to produce 15 million pounds of molybdenum and 5 million pounds of copper per year.
Some interest in copper was shown by exploration companies during the last half of 1988 but, although there are known copper reserves in Nevada, the price of copper would have to be much higher than 1988 prices in order for them to be mined-profitably.
---Dick Jones, Metal-Resources Geologist