The Future of Gold: Peaking Production, Shrinking Discoveries, and Market Impacts

Taking the Helm at Krait Gold Corp.: A Strategic Move

Stepping into the role of CEO at Krait Gold Corp. and guiding the company toward a public listing on the Canadian stock exchange was an obvious decision for me. With over a decade of investment banking experience specializing in Natural Resources & Energy, particularly Metals & Mining, I felt well-equipped for the challenge.

While much of my past deal-making focused on industrial minerals—coal, iron ore, and copper—precious metals have never been unfamiliar territory. I come from one of the world’s leading mining powerhouses: the #1 silver-producing and #6 gold-producing country, according to the U.S. Geological Survey’s Mineral Commodity Summaries (January 2023).

The Power of Research in Investment Banking & Mining

Despite my strong foundation in mining finance, my first priority in this new role was to deepen and update my understanding of the gold sector, particularly in the context of junior mining companies and global supply trends.

Many believe that an investment banker’s most critical skill is financial modeling. However, in my experience, the real cornerstone of success is rigorous, insightful research. High-quality research has always been essential in my decision-making—whether in trading, M&A, capital markets, or advisory. It is also a fundamental part of due diligence, enabling us to assess financial health, valuation, and market positioning for clients and target companies.

Diving Deep into the Gold Sector

To refine my knowledge, I immersed myself in extensive research on:

• Junior mining companies and their growth trajectories
• Gold production trends and long-term supply forecasts
• Jurisdictional risk assessments, comparing mining-friendly regions versus high-risk jurisdictions
• Market outlooks and evolving investment trends

Among the most compelling recent analyses I encountered was a report published by S&P Global Market Intelligence:

?? Gold from Major Discoveries Grows 3%, Although Recent Discoveries Remain Scarce

Key Takeaways from the S&P Report

1. Major Gold Discoveries Are in Decline

From 1990 to 2023, a total of 350 deposits containing 2.9 billion ounces of gold have been identified. However, most of these discoveries were made decades ago—recent finds have been smaller and far less frequent. Since 2020, only five major discoveries have been recorded, contributing just 17 million ounces (Moz) of gold.

Notably, almost all new discoveries come from outside the top seven gold-producing nations, meaning they lack the infrastructure for rapid production. Additionally, the average size of new discoveries has fallen from 5.5 Moz (2010-2019) to just 3.5 Moz, reinforcing the supply scarcity issue.

2. Gold Production to Peak in 2026

Global gold supply is projected to peak at 110 Moz in 2026, driven by increased production in Australia, Canada, and the U.S. However, output is expected to decline to 103 Moz by 2028 due to resource depletion and reduced supply from these key mining nations.

The industry’s preference for brownfield exploration (developing known assets) rather than greenfield projects (new discoveries) has further constrained new large-scale finds.

3. Exploration Spending Trends—A Misleading Narrative?

Since 2017, gold exploration budgets have risen, peaking at $7 billion in 2022 before declining in 2023 due to tighter financing conditions. While some view this as a positive trend, a closer look reveals a different reality:

• The increase in spending comes primarily from major mining companies, not junior miners.
• Only 44% of recent resource announcements stem from new greenfield projects—the rest are expansions of existing deposits.
• The industry's risk aversion and focus on developing known assets over major discoveries could lead to long-term supply constraints.

4. My Take: A Looming Supply Crunch

Unlike the S&P report’s optimistic tone regarding future supply, I see significant short- and medium-term challenges. From my own capital raising and M&A experience in the mining sector, I know that moving from discovery to production can take a decade or more—even longer in heavily regulated jurisdictions like the U.S. and Australia.

Given this timeline, any mines that stated discoveries in 2015 onward likely won’t contribute to global supply until at least 2030. This means the industry is heading toward a structural supply deficit far sooner than some anticipate.

Key Insights & Implications

1. Declining Discovery Rates & Smaller Deposits

• New gold discoveries are becoming scarcer and smaller in size.
• The industry is prioritizing brownfield projects over large-scale new discoveries.

2. Gold Supply to Peak, Then Decline

• Global gold production will peak in 2026 at 110 Moz, then drop to 103 Moz by 2028.
• No major discoveries are in sight that could offset this decline.

3. Misleading Exploration Spending Trends

• While exploration budgets have grown, funding is concentrated in major miners—not juniors.
• The lack of greenfield investment means fewer breakthrough discoveries.

4. M&A Activity to Rise

• With gold majors struggling to replace reserves, expect a wave of acquisitions targeting mid-tier and junior miners.

5. Potential for Higher Gold Prices

• A tightening supply, combined with economic uncertainty and inflationary pressures, could sustain strong gold prices.

6. Geopolitical & ESG Factors Will Shape the Industry

• Countries with high reserves may impose stricter regulations or nationalization policies.
• Sustainability pressures could push miners toward greener extraction methods.

How is Krait Gold Positioned?

Given the industry’s looming supply crunch and structural imbalances, Krait Gold Corp. is strategically positioned to capitalize on shifting market dynamics. Our approach focuses on:

? Targeting high-potential, underexplored assets with strong long-term upside. We have selected three promising gold properties (out of more than thirty we analyzed) to be added to our asset portfolio. Krait has already signed on one property, and the other two are in advanced negotiation stages with binding exclusivity while we finalize terms.

? Focus on Resource Expansion from brownfield, not greenfield projects. All three properties have historical works and/or reports, thus mitigating the inherent risks associated with pursuing greenfield exploration projects. This aligns with the noticeable trends aforementioned above, where smart money is targeting proven resource areas rather than speculating on virgin greenfield sites.

? Pursuing disciplined capital allocation to ensure sustainable growth and a strong position when entering M&A discussions. Krait is working backwards, focusing on the premier asset with a viable exit strategy. We anticipate a wave of acquisitions beginning in the latter half of 2025 and continuing through 2026 as the gold supply reaches its forecasted peak. Major miners in Canada will find it difficult to replace reserves and will seek to add as much supply as possible to utilize their existing infrastructure. All three of Krait’s properties align with this strategy.

While the broader gold industry faces growing challenges, companies that act early—securing high-quality assets and advancing exploration strategically—will be well-positioned for the future.

As we move forward with Krait Gold’s journey to a public listing, I remain committed to leveraging deep research, strategic foresight, and a disciplined approach to create long-term value for our stakeholders.

Final Thoughts

The gold mining industry is at a turning point. A decade-long focus on existing deposits, declining discovery rates, and looming supply constraints suggest that the sector must adapt quickly. While major miners have leaned on brownfield development, the reality is that new large-scale discoveries are urgently needed to sustain long-term supply. And the closer these discoveries are to existing operations, the more likely that an acquisition will take place.

With gold prices expected to remain strong and M&A activity on the rise, the next five years will shape the future of the gold industry. For companies that position themselves strategically today, the opportunities are immense.

At Krait, we’re not reinventing the wheel—we’re simply approaching the landscape with a distinct strategy and disciplined capital allocation. All of our Seed Investors committed to a 12-month holding period when they subscribed, and the same will apply to our upcoming IPO round.

Just as we are selective with our assets, we are equally discerning with our investors and partners. Our shareholders are fully aligned with our vision and strategy, making Krait Gold Corp. truly exceptional.

Wishing you a blessed week!

Oscar Mendoza

CEO Krait Gold Corp.