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Gold production grows in U.S. state Nevada as gold price rises

(Xinhua)

16:25, August 16, 2011

LOS ANGELES, Aug. 15 (Xinhua) -- Gold production has increased in the U.S. state of Nevada, the country's largest gold-producing state, as the gold price continues to rise and the stock market tumbles.

In Nevada, 5,338,559 ounces of gold were produced in 2010, worth 6.54 billion U.S. dollars, Nevada Division of Minerals Deputy Administrator Doug Driesner said.

That's a big increase over 2009, when 5,033,000 ounces of gold were produced, valued at about 4.9 billion dollars.

The value of all kinds of minerals produced in the western state exceeded 7 billion dollars in 2010, Driesner said.

Nevada's entire mining industry paid 204 million dollars in state and local taxes in 2010, the Nevada Mining Association said.

Mines owned by mining company Barrick Goldstrike in Nevada produced 2.8 million ounces of gold in 2010, more than the company's mines in South America, Australia and Africa, according to corporate reports.

Newmont Mining Corporation mined 1.7 million ounces of gold in the state last year, more than in Australia, Indonesia and Africa.

Barrick Goldstrike estimates that its Nevada mining claims contain 39.2 million more ounces of gold, more than Chile, Argentina, Australia and Africa.

Newmont estimates its Nevada holdings contain 28.5 million ounces, more than Australia, Africa, South America and Indonesia.

The rising gold price, having hit a new record recently, closed at 1,761 dollars per ounce on Monday. That is expected to bring more dollars to the state.

Gold mining is a major industry in Nevada, the world's fourth largest gold producer. The state's gold production now accounts for 79 percent of the country's total.

Nevada's gold reserves are estimated at 200 million ounces. The gold, which is invisible, must be mined, dissolved with cyanide, and then reassembled to make a solid. It is a costly process.

Mining companies are rushing to start drilling in rural Nevada, which boosts both local and state economies.

"Mining is important to our rural counties in terms of jobs and the wages that those jobs pay, as well as the overall economic impact to the rural community," said Jeff Fontaine, executive director of the Nevada Association of Counties.

Mining companies pay up to five percent in county and state taxes, so the more minerals they mine and sell, the more money the state will get.

Gold mining is counter-cyclical, Fontaine said. So when the economy is down, the gold price is up. It's a boom and bust type of industry, he said.

Nevada was made famous in 1859 by the discovery of the Comstock Lode, the country's richest known silver deposit. Large quantities of gold, silver, copper, lead, zinc, mercury, barite, and tungsten have been mined in the state ever since. Oil was discovered there in 1954. But now, gold far exceeds all the minerals produced in Nevada in value of production.

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