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Gold

Gold is sought after not only for investment purposes and for  jewellery, but it is also used in the manufacturing of certain electronic and medical devices.  The demand for gold, the amount of gold in the central banks’ reserves, the value of the U.S. dollar and the desire to hold gold as a hedge against inflation and currency devaluation, all help drive the price of gold, which is currently  trading at over $1,200/oz.

Gold prices 1975 to Present

It is the surge in gold prices and the increasing cost of finding gold which has brought Ireland back into play as a potential source of gold. At present only the small Galantas mine in Omagh is operating but hopes are high that Dalradian will commercialise their discovery at Currinahault in Tyrone.  In the mid 1790s gold was discovered in Avoca.  A gold rush ensued.  Despite spending millions and using the best technology a commercial discovery has never been made. Connemara, and its predecessors, have been working in Wicklow/Wexford for 25 years.  Excellent grades have been found in numerous areas but it has been impossible to tie the various discoveries into one viable deposit.  The arrival of Hendrick promises a renaissance.  This experienced Canadian gold prospector brings cutting edge exploration technology.  He is exploring his own ground as well as joint venturing with Connemara.

Gold in Ireland

Ireland has always been prospective for gold and continues to have a significant number of prospectors throughout Ireland. Since the 1790’s the Mines River area has been synonymous with gold. A number of finds of alluvial gold in rivers and streams in the area resulted in the ‘Avoca Gold Rush’ in the late 1700’s – early 1800’s. The British sent a detachment to control the situation but the soldiers joined the panning.  It was a short lived boom but since then numerous unsuccessful attempts have been made to find the mother lode.It is said that Charles Stuart Parnell panned the river behind his house, Avonmore, in the Wicklow hills, until he had enough gold to make a wedding ring for Kitty O’Shea.  In recent years a Garda in Naas using a metal detector found in the Wicklow hills some large beautiful nuggets.

Connemara Mining has always been a big believer in ‘closeology’ i.e. the best place to find gold is where gold has already been discovered.  There is significant information on the prospectivity of the area as earlier explorers had previously spent a significant amount of money looking for the source of the Avoca gold rush. New technology and new eyes, through the partnership with Hendricks Resources, has meant that this area has once again become a highly prospective opportunity.

The most immediate prospect for a significant gold mine is Currinahault in Co Tyrone, operated by Dalradian, a Toronto listed company run. Gold grades of over half an oz per tonne suggest that a significant gold mine could evolve. Conroy Gold and Diamonds has been exploring for gold in Monaghan/Fermanagh for some years where a large low grade deposit has been outlined. IMC, an Irish company and TNR Gold, a Vancouver company, hold ground in Wicklow/Wexford. Both companies are searching for the source of the 1796 alluvial gold discoveries.

Gold Fundementals

Gold never tarnishes.  It is the ultimate store of value.  It has growing industrial and jewellery uses.

Value of the U.S. Dollar The price of gold is generally inversely related to the value of the United States dollar a weaker dollar is likely to drive the price of gold higher.  During times of economic uncertainty and when the dollar is weak people prefer to invest in gold, through vehicles such as gold funds or coins. Gold is seen as a hedge against a depreciating dollar. However, if the dollar was to appreciate the opposite would occur.

Central Bank Reserves –  Central banks hold gold as well as paper reserves, recently Central Banks have been buying more gold than they are selling, the first time this has happened in decades. As the central banks diversify their monetary reserves – away from the paper currencies they’ve accumulated and into gold – the price of gold rises. Due to the greater uncertainty that exists since the recession of 2008, many countries have diversified further into gold. Many of the world’s nations have reserves that are composed primarily of gold, including the United States, Germany, Italy, France, Portugal, Greece and the Euro area.

Worldwide Jewelry and Industrial Demand – In 2014, jewellery accounted for approximately 54% percent of gold demand, which totalled 2,152.9 tonnes, according to the World Gold Council. India, China and the United States are the largest consumers of gold for jewellery in terms of volume. Increasing demand is leading to pressure on prices. Another 12% of demand is attributed to medical and industrial uses for gold, where it is used in the manufacturing of medical devices like stents and precision electronics like GPS units.

Gold Production –  Major players in worldwide gold mining include China, South Africa, the United States, Australia, the Russian Federation and Peru. Gold mine production increased by about three percent in 2014 to about 2,652 tonnes.. Despite this small increase, however, gold mine production has been in a decline since the early 2000s. One factor is that all the “easy gold” has already been mined; miners now have to dig deeper to access quality gold reserves, as a result the costs of gold mine production has increased.

Wealth Protection – During times of economic uncertainty, as seen during the recession of the late 2000s, more people turn to investing in gold because of its enduring value. Gold is often considered a “safe haven” for investors during uncertain times. When the expected or actual returns on bonds, equities and real estate fall, the interest in gold investing increases, driving up its price.

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