Nevada: A Leader in Gold Production

Other commodities, however, gain interest in the No. 1 mining-friendly jurisdiction

Mining in Nevada has become synonymous with gold. The state leads the nation with more than 4 million ounces (oz) of gold extracted annually from the mines in northern Nevada. While that figure is significant, total gold production has slipped steadily from 5.5 million oz in 2017. Head grades have declined and many open-pit mines have transitioned to underground operations, which means Nevada’s gold miners are working harder to maintain production.

There is more to the Nevada mining scene than gold. Mines in the state produce significant amounts of silver, copper, lithium, and other minerals. Some mining companies are currently looking to develop deposits that contain critical minerals with the hopes of expedited permitting and tax incentives from the federal government. Similarly, Nevada has vast deposits of lithium in both brine and clay formations, and the demand for it is expecting to grow exponentially for the development of battery-electric vehicles.

Throughout the state, prospectors are searching for the next big discovery. Meanwhile, geologists are recording the data and converting historical information to assist development. An example, is the recent release of precompetitive data from the Nevada Bureau of Mines and Geology (NBMG) and the U.S. Geological Survey as part of the USGS EarthMRI program (https://ngmdb.usgs.gov/emri/#5.37/38.35/-115.48)

“Nevada remains under-explored,” said Dr. Simon Jowitt, Director for the Ralph J. Roberts Center for Research in Economic Geology for the NBMG. “We have had a lot of success with Carlin-type and epithermal gold, silver, and lithium, but there’s opportunities in all sorts of other areas, base metals for example, and in both greenfield and brownfield environments. Applying increased and improved knowledge of mineral systems and mineralizing processes could open all sorts of opportunities.”

Nevada by the Numbers

Nevada produced $8.93 billion in non-fuel commodities in 2022, second only to Arizona. With the recent increase in the gold price, the state may take over the No. 1 slot for 2023. Nevada leads the nation in gold production with more than $7.2 billion of gold extracted in 2022. It is the only state that produced lithium compounds from primary extraction ($104 million) at Albemarle’s Silver Peak mine. That will likely change soon with construction underway at Lithium Americas’ Thacker Pass mine.

Other metal production included copper ($508 million), silver ($120 million), and molybdenum ($5 million). Most of the copper production originated KGHM’s Robinson operations near Ely, and Coeur Mining’s Rochester mine in Pershing County led the state in silver production.

Nevada also produced significant amounts of construction aggregates (sand, gravel, and crushed stone; ($285 million), diatomite ($60 million), limestone and dolomite (mainly for cement, $36 million), gypsum ($49 million), and silica ($23 million). The state also produces industrial minerals such as barite ($36 million), magnesite ($9 million), and specialty clays such as sepiolite and saponite ($15 million). Barite is considered a critical metal, and there is potential for expansion in this area.

The Silver state also produced significant amounts of geothermal energy ($322 million) and some petroleum ($19 million).

“Viewing Nevada in the context of the wider U.S., we provide about 9% of the total value of non-fuel mineral production as a whole,” Jowitt said. “If we look at the production value of Nevada’s mineral and energy sector from the 1970s through to the present day, a peak occurred in 2012 with the increasing price of gold,” Jowitt said. “We may see a slight peak or certainly an increase in the value of gold production in 2023, and copper will add value to the peak as well. Silver has fluctuated somewhat over the last few years.

“Nevada also saw a significant jump in lithium value, but not because the state increased the amount of lithium it produced. The jump was related to a spike in lithium prices in 2022,” Jowitt said. “Lithium’s value grew from $42 million in 2021 to $104 million in 2022. Less lithium was produced in 2022 compared to 2021, but that lithium was worth 150% more. Lithium prices have pulled back dramatically at the end of 2023, but there is still significant potential for lithium production.”

In 2022, Nevada mined a little more than 4 million oz of gold, which is 73% of total U.S. gold production (5.6 million oz) and roughly 3.5% of global gold production (117 million oz). “Only the nations of China, Russia, Australia, Canada and Ghana produced more gold than Nevada,” Jowitt said. “Nevada’s gold production shrunk from 4.5 million oz in 2021 to 4 million oz in 2022, and Ghana overtook Nevada in 2022. The improvement in the gold price will lead to further interest in gold in the state and we might retake that position. There is a great deal of interest in gold exploration and drilling projects have resumed throughout the state.”

Among the main gold producers in the state, Nevada Gold Mines (NGM) is the clear leader, followed by Kinross Gold and SSR Mining. NGM also produces substantial amounts of silver and copper from its Phoenix operations. Kinross Gold’s Round Mountain and Bald Mountain operations also produce a significant amount of silver. “We have several medium-sized producers in the state with significant potential for expansion,” Jowitt said.

Precious Metals in Nevada

Most of the mineral exploration activities in Nevada are focused on gold, with significant brownfield expansion and greenfield exploration activity targeting both Carlin-type and epithermal gold systems. Significant exploration and development activities are taking place in the Walker Lane Trend. Silver exploration is also active in numerous areas.

“As far as current resources and reserves of precious metals, Nevada has publicly reported reserves of nearly 60 million oz of contained gold and 221 million oz of contained silver,” Jowitt said. “Both of these figures have increased from 2021, despite the fact we are producing more than 4 million oz/y of gold and a significant amount of silver. The current publicly reported resources are 184.5 million oz of contained gold and 1.2 billion oz of contained silver. These figures outline a lot of potential expansion and development in the state.”

Looking at gold production, from the 1840s to the present day, three gold rushes have taken place in the U.S., the current boom is the greatest and longest sustained, but it is dipping, Jowitt explained. “A significant amount of production occurred in the last 30 years, as much as 314 million oz,” Jowitt said. “A lot of production potential remains, especially with gold prices at record levels.”

Over the course of the last 50 years, Nevada saw gold production ramp up to a peak of nearly 9 million oz in 1998. The state has since seen a gradual decline since. “Production is moving away from more mature operations in the Carlin Trend,” Jowitt said. “We are seeing increased interest in epithermal exploration, especially with the activities in Goldfield and Tonopah within the Walker Lane Trend.”

Nevada’s silver production followed a similar trend over the same period. Silver production ramped up to nearly 25 million oz during the late 1990s with a steeper decline to the present-day plateau of roughly 5 million oz/y. “Nevada may again see an expansion in silver production,” Jowitt said. “There is a significant amount of interest in silver exploration for silver and polymetallic deposits where silver will be produced as a byproduct.”

Base Metals in Nevada

Several companies are exploring Nevada for copper in porphyry, skarn, and carbonate replacement deposits (CRD) and polymetallic deposits hosting zinc-lead-silver-gold mineralization in central and eastern Nevada. “These deposits have gained more attention with zinc earning a distinction as a critical metal by the federal government during the last few years,” Jowitt said. “If a mine is producing a critical metal, it could realize expedited permitting and tax incentives from the federal government.”

Copper was produced at the Robinson operations, the Phoenix operations (co-product with gold) and Pumpkin Hollow in 2022. Pumpkin Hollow ceased mining operations in mid-2022 and recommenced in August 2023 after completing some development work. Nevada has publicly reported proven and probable (or equivalent) copper reserves of 2.5 billion lb contained copper, which was up 36% from 2021. The state has publicly reported resources of 27.2 billion lb contained copper.

Vanadium exploration has also emerged within the state with measured, indicated and inferred (or equivalent) resources with 603 million lb contained vanadium pentoxide (V₂O₅) reported publicly to date. Nevada Vanadium Mining Corp.’s Gibellini vanadium project is evaluating sediment hosted vanadium systems. Vanadium is a critical metal, and depending on the economics, Nevada Vanadium could bring Gibellini online soon.

Lithium and Other Critical Minerals

The Silver Peak mine was the only primary lithium producer in the U.S. in 2022. It shipped 8.1 million lb of lithium carbonate, 65,415 lb of anhydrous lithium hydroxide, and 55,116 lb of lithium hydroxide monohydrate.

The number of drill rigs turning relates directly to the price of gold.

Construction at the Thacker Pass mine began in March 2023 with target production of 40,000 mt/y lithium carbonate equivalent (LCE) during phase 1 (years 1-4) and 80,000 mt/y LCE in phase 2 (year 5 onward).

“Throughout the state, there is significant lithium-related exploration taking place around the McDermott Caldera, Tonopah, Silver Peak, Clayton Valley, and various other areas,” Jowitt said. “We also know of exploration activities looking for lithium clays and lithium brines at Alkali Flat and Big Smoky Valley. Suffice it to say there is a lot of lithium interest in the state and it is not going away any time soon.

“This can be inferred from the number of placer claims that are being used to explore lithium brines,” Jowitt said. “That’s an indication of lithium brine exploration activities, which does not include lithium clay or sedimentary exploration and drilling projects of which there are a significant number currently ongoing in the state.”

Reviewing Nevada’s lithium reserves and resources, two clay projects have delineated reserves, the Thacker Pass mine, which is under construction, and Ioneer’s Rhyolite Ridge project, which also has significant amounts of boron as a co-product. The Silver Peak mine still has a decent amount of reserves and resources delineated. There’s another brine project at Clayton Valley owned by Pure Energy, which has some resources outlined as well, and then there’s a lot of expansion potential in places like Tonopah Flats, Horizon Lithium, etc., all of which have significant outlined resources.

“Conversion of resources to reserves is always problematic, especially given today’s permitting situations,” Jowitt said. “This is just the tip of the iceberg in terms of potential for lithium in the state. That’s very important considering the projected rise in lithium demand.”

The International Energy Agency (IEA) has predicted the world will need 242,000 mt/y to 374,000 mt/y of lithium by 2030. World production of lithium is roughly 110,000 mt/y. By 2024, the IEA has predicted that lithium demand will grow to 460,000 mt/y to 1.16 million mt/y. What makes this figure even more insurmountable is that it requires 5.3 mt of LCE to make 1 mt of lithium.

Nevada has 1.11 million mt of lithium reserves and 21.3 million mt of lithium resources. “So, in essence, if we think about lithium as a crucial commodity for batteries for electric vehicles, we will need to bring some of the resources we know about into production and also find new resources,” Jowitt said. “Nevada is one of the key places we can do that domestically.”

Mining companies should also consider the by- and co-product possibilities for critical metals production. “We know that there is significant potential for byproducts, for metals like tellurium, indium, gallium, germanium, antimony, etc., which have been identified within gold and porphyry-skarn-CRD type systems in Nevada,” Jowitt said. “We know that these metals are already present in mineralizing systems within the state. We need to know where they sit and what minerals are hosted within them, and how we can potentially enhance their production when we are looking at the production of main minerals like gold, silver, zinc, and copper.”

If a deposit contains a critical metal or mineral, there are significant implications as far as project permitting and tax breaks, as well as support for exploration development from the federal government. “The U.S. Department of Energy and the Department of Defense are keen on securing extra supplies of these critical commodities,” Jowitt said. “They are willing to offer loans, grants, and research funding to understand how we can realize the potential of these deposits, and we are already seeing some deposits in the state benefit from these opportunities. These funding opportunities are likely to increase over the next couple of years.”

In a similar vein, the Inflation Reduction Act offers tax credits for battery minerals that are domestically sourced and processed. “There are lots of incentives to look for critical metals domestically either as main products if you’re exploring for things like zinc or lithium or vanadium or to think about byproduct potential flows from existing operations and for operations being developed right now,” Jowitt said.

One example is i-80 Gold’s Ruby Hill project, which has skarn-CRD type mineralization. “Core samples contain quite a bit of galena, but they also have beautifully zoned sphalerite, which has potential to contain significant amounts of indium, germanium, gallium, etc.,” Jowitt said. “This is just one of many examples of projects that are ongoing within the state or projects where mining is already occurring, where we know there are critical metals. We just need to understand them better and potentially extract them.”

Exploration Trends in Nevada

Most of the exploration programs in Nevada are focused on gold, but some drilling programs were searching or further defining silver, copper, vanadium, polymetallic mineralization, and cobalt-nickel mineralization. A total of 115 drilling programs were identified in 2022, excluding drilling for lithium clay/sedimentary mineralization, lithium brines, and industrial minerals. This is a significant increase in identified drilling programs from 2021, and the highest number of identified drill programs since 2012. With the increase in gold price, more rigs will likely be turning today.

“These are only the drilling programs that have publicly released information,” Jowitt said. “Major mining companies undertaking exploration in the state do not discuss exploration results unless they find something spectacular. While one would assume exploration drilling would increase with the price of gold, that depends on the availability of funding.”

Drilling projects do correlate with the price of gold, which is why Nevada has the highest number of drill projects since 2012. In 2022, a lot of exploration drilling was taking place along the Walker Lane, Battle Mountain-Eureka, and Carlin Trends. “Mineral exploration is taking place throughout the state, but certainly some areas are busier than others,” Jowitt said. “We have major and minor drill projects and we’ve also split this up by major, mid-tier, and junior companies. There’s a significant amount of activity from majors and juniors in the state.”

According to the Fraser Institute Survey in 2022, Nevada was the mining industry’s No. 1 destination for investment attractiveness. “We are No. 1 and we intend to maintain that status,” Jowitt said.

“All of this information and more is available in the NBMG publication, The Nevada Mining Industry 2022, which is available for free online,” Jowitt said. “We’re aiming to expand this into the future to do more in the areas of critical metals and keep people updated on exploration activities in the state.”

Gold remains the main target in Nevada, but interest is increasing in a range of mined commodities. “Lithium, copper, polymetallics, zinc, lead, gold, silver, and multiple other commodities and mineral systems have potential in Nevada,” Jowitt said. “And, that potential is often unrealized or overlooked with the focus on gold. There is a significant unrealized potential for the discovery of new mineralizing systems in the state. We’re increasing our geological mapping via the state map program and other programs. We’re actively digitizing legacy data, match reports and more via the National Geological and Geophysical Data Preservation Program. These are being made available via the NBMG website.

“What we are trying to do is help prospectors explore more effectively,” Jowitt said. “We want these programs to expand and continue to make sure we can both help explorers discover new mineralization, make the most of the mineralization they already know about, and also make sure Nevada maintains that No. 1 spot in the Fraser Survey.”

This article is based on a presentation, Nevada’s Mineral Industry in 2022, which Dr. Simon Jowitt, the Arthur Brant Chair of Exploration Geology and Director for the Ralph J. Roberts Center for Research in Economic Geology for the Nevada Bureau of Mines and Geology at University of Nevada Reno, delivered at the American Mining and Exploration’s annual conference in Reno, Nevada, during December 2023.