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Why Gold is Money: A Periodic Perspective

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Why Gold is Money: A Periodic Perspective

Why Gold is Money

The economist John Maynard Keynes famously called gold a “barbarous relic”, suggesting that its usefulness as money is an artifact of the past. In an era filled with cashless transactions and hundreds of cryptocurrencies, this statement seems truer today than in Keynes’ time.

However, gold also possesses elemental properties that has made it an ideal metal for money throughout history.

Sanat Kumar, a chemical engineer from Columbia University, broke down the periodic table to show why gold has been used as a monetary metal for thousands of years.

The Periodic Table

The periodic table organizes 118 elements in rows by increasing atomic number (periods) and columns (groups) with similar electron configurations.

Just as in today’s animation, let’s apply the process of elimination to the periodic table to see why gold is money:

  • Gases and Liquids
    Noble gases (such as argon and helium), as well as elements such as hydrogen, nitrogen, oxygen, fluorine and chlorine are gaseous at room temperature and standard pressure. Meanwhile, mercury and bromine are liquids. As a form of money, these are implausible and impractical.
  • Lanthanides and Actinides
    Next, lanthanides and actinides are both generally elements that can decay and become radioactive. If you were to carry these around in your pocket they could irradiate or poison you.
  • Alkali and Alkaline-Earth Metals
    Alkali and alkaline earth metals are located on the left-hand side of the periodic table, and are highly reactive at standard pressure and room temperature. Some can even burst into flames.
  • Transition, Post Transition Metals, and Metalloids
    There are about 30 elements that are solid, nonflammable, and nontoxic. For an element to be used as money it needs to be rare, but not too rare. Nickel and copper, for example, are found throughout the Earth’s crust in relative abundance.
  • Super Rare and Synthetic Elements
    Osmium only exists in the Earth’s crust from meteorites. Meanwhile, synthetic elements such as rutherfordium and nihonium must be created in a laboratory.

Once the above elements are eliminated, there are only five precious metals left: platinum, palladium, rhodium, silver and gold. People have used silver as money, but it tarnishes over time. Rhodium and palladium are more recent discoveries, with limited historical uses.

Platinum and gold are the remaining elements. Platinum’s extremely high melting point would require a furnace of the Gods to melt back in ancient times, making it impractical. This leaves us with gold. It melts at a lower temperature and is malleable, making it easy to work with.

Gold as Money

Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.

Perhaps modern societies would be well-served by looking at the properties of gold, to see why it has served as money for millennia, especially when someone’s wealth could disappear in a click.

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Visualizing the Genealogy of Exploration Success

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Mineral Exploration Success

Visualizing the Genealogy of Exploration Success

In the last decade, 63% of all mineral discoveries in the Western world were made by junior explorers. These small companies are the vision of a dedicated few.

It is the people that make a great company, and it is great explorers that make great discoveries. This infographic sponsored by SKRR Exploration shows the incredible experience and knowledge of two leaders in mineral exploration brought together in one new venture.

Two Paths to Exploration Success

According to the common adage, overnight success stories take a long time. Ron Neolitzky and Ross McElroy have traveled two different paths but along their route, they have uncovered vast amounts of mineral wealth in Canada.

Ronald Netolitzky Ross McElroy
  • 1964-67: Graduated from the University of Alberta with a B.Sc and M.Sc. in Geology.
  • 1985: Became President of Delaware Resources and acquired the Snip property.
  • 1986: Struck a gold discovery at the Snip property, which produced 1Moz of gold over its lifetime.
  • 1988: Invested in Consolidated Stikine Resources and drill-tested Eskay Creek, which would go on to produce 3.3Moz of gold and 160Moz of silver over its lifetime.
  • 1990: Sold Eskay Creek stake to International Corona for $67/share as part of an acquisition.
  • 1990: Received the Bill Dennis Prospector of the Year Award.
  • 1993: Purchased 100% of the Brewery Creek property as president of Loki Gold.
  • 1996: Transformed Brewery Creek into a heap-leach operation.
  • 1996: Merged Loki Gold with Baja Gold and Viceroy Gold to create an entity with an annual production of 200Koz of gold.
  • 1996: Received AME’s E.A. Scholz Award for discovery and development achievements.
  • 2003: Acquired the Galore Creek property for Spectrum Gold, later merged with NovaGold Resources and partially sold to Teck Resources for $275M.
  • 2007: Oversaw Yamana Gold’s $577 million acquisition of Viceroy Resources as chairman.
  • 2010: Oversaw Osisko Mining’s $372 million acquisition of Brett Resources as chairman.
  • 2015: Inducted into the Canadian Mining Hall of Fame.
  • 1987: Graduated from the University of Alberta with B.Sc. in Geology.
  • 1987: Joined uranium giant Cameco and worked on the McArthur River discovery in Saksatchewan’s Athabasca Basin, which is now the world’s largest uranium mine.
  • 1989: Worked with French nuclear Company Cogema (now Orano) on the Shea Creek uranium discovery in Saskatchewan, Canada.
  • 1990-99: Managed the Hope Bay Gold Project with BHP Minerals, discovering three high-grade gold deposits.
  • 2007: Joined Fission Energy as VP of Exploration before rising to the rank of COO.
  • 2009: Led the technical team that discovered the high-grade J Zone uranium deposit at Waterbury Lake and sold to Denison Mines.
  • 2012: Used airborne radiometrics and radon in-lake survey technology to discover the Triple R uranium deposit on the Patterson Lake Property, with an indicated resource of 102M lbs of U3O8.
  • 2013: Received the Mining Person of the Year Award from the Northern Miner.
  • 2014: Received the Bill Dennis Award for a Canadian discovery.

This combined experience is coming to bear in one company to uncover Canada’s next mineral frontier.

Bringing Experience Together: SKRR Exploration

SKRR brings together the experience of two great explorers to uncover the next mineral frontier, Saskatchewan. This junior explorer is working on the next great discovery with 6 projects in the Trans-Hudson geological corridor

  • Father Lake Nickel Project: Copper, Nickel
  • Ithingo Project: Gold
  • Irving Project: Gold
  • Cathro Project: Gold
  • Leland Project: Gold
  • Olson Project: Gold
  • Manson Bay: Gold

With a proven location and legacy of exploration success, SKRR is ready to unlock the next mineral frontier in Saskatchewan and continue the tradition of a dedicated few uncovering the next great discovery.

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The World’s Top 10 Gold Mining Companies

Together, the world’s top 10 gold mining companies account for roughly 22% of the share of the total gold market.

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Top 10 Gold Mining Companies

The World’s Top 10 Gold Mining Companies

Unlike paper currency or many other types of assets, gold has maintained its value throughout the ages.

First used by cultures in modern-day Eastern Europe in 4,000 BC to make decorative objects, the metal today represents a global business with operations on every continent, except Antarctica.

The industry is dominated by a select group of majors.

Together, the world’s top 10 gold miners produced 27.48 million ounces (Moz) in 2020, worth approximately $48 billion, according to data from Mining Intelligence.

North America Leading

At a country level, China is the largest producer in the world accounting for around 11% of total global production.

However, no Chinese company appears among the top miners.

RankCompanyHeadquartersCountry2020 Production (Moz)
1Newmont DenverUSA 🇺🇸5.88
2Barrick GoldTorontoCanada 🇨🇦4.84
3PolyusMoscowRussia 🇷🇺2.87
4AngloGold AshantiJohannesburgSouth Africa 🇿🇦2.81
5Kinross GoldTorontoCanada 🇨🇦2.38
6Gold FieldsJohannesburgSouth Africa 🇿🇦2.13
7Newcrest MiningMelbourneAustralia 🇦🇺2.06
8Agnico EagleTorontoCanada 🇨🇦1.73
9Polymetal InternationalSt. PetersburgRussia 🇷🇺1.40
10Harmony GoldJohannesburgSouth Africa 🇿🇦1.38

At the top of the gold mining companies list, Colorado-based Newmont has ownership of mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.

As the only American company on the list, Newmont produces 21% of the yellow metal poured by the top companies.

Canada, which is known for its mining industry, has three companies on the list; Barrick Gold, Kinross Gold, and Agnico Eagle, producing 32% combined.

Russia, which is expected to become the world’s top producer by 2029, has two companies ranked. Together, Polyus and Polymetal represent 15% of the top miners’ production.

The top 10 players account for ~22% of the total market share, which is anticipated to grow due to increased merger and acquisition activities.

Wealth and Luxury

Over six and a half thousand years after its discovery, more than 90% of the gold mined annually is destined for jewelry, bullion, and coins.

  • Jewelry: 36.83%,
  • Investment: 46.64%,
  • Central banks: 8.58%,
  • Technology: 7.95%

The metal is also used in dentistry, as it is the best material for fillings and crowns since it is easy to insert, and is non-reactive with the human body.

Golden Future

Global production fell by 1% in 2020, the first decline in a decade, according to the World Gold Council.

Some analysts argue the world has reached “peak gold” – which means that the maximum rate of extraction has passed and the production of the metal will continue to fall until, eventually, mining for it shall cease entirely.

Demand, however, shows no sign of slowing down as the golden metal remains firmly synonymous with security, stability, and longevity.

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