Gold Digger: Gold is running hot, but can miners also hit their marks on ESG?

• Gold prices are running higher, but the world’s top gold miners have pulled emissions below 30,000tCO2e for the first time since 2014
• ESG metrics remain important for investors with a sustainability focus
• Government payments rise as gold prices continue to break new records

As gold prices ran hot in 2024, gold miners are heading the other way in a crucial metric, with Metals Focus revealing in a new ESG report that greenhouse gas emissions from the largest companies in the sector hit their lowest level in a decade.

Bullion closed 2024 after 41 price records, and has clocked around 30 this year, breaching US$3650/oz on the LBMA this week.

While gold has been a popular investment for central banks and specialists already indoctrinated into the precious metals world, it is still being ignored to an extent by generalist funds.

The commodity is a crucial hedge against uncertainty, rising amid concerns weakening employment data in the US will tank the greenback and stimulate rate cuts, which are good for the metal.

But often investors with an ESG focus have steered clear due to the perception that, unlike battery metals used in EVs and electrification, it does not have utility – that carbon emissions related to gold mining are wasted energy.

That scope 1 and 2 emissions have been falling for four straight years will help miners make their case their companies belong in sustainability-focused stock portfolios.

According to Metals Focus, they fell 2% YoY to 29,922kt of CO2e.

In part that was down to divestments, and emissions intensity rose for the third straight year, with scope 3 emissions also up 2% to 26,207kt. But renewable energy projects and increased grid connections have played a role in keeping mine-level emissions in check.

“The reduction reflected asset divestments, renewable energy projects, and new grid connections, although lower gold output meant average emissions intensity increased for the third straight year,” the report authors said.

“Scope 3 emissions rose 2% to 26,207kt, while sulphur dioxide and nitrous oxide emissions declined by 16% and 8% respectively, reflecting improved environmental performance.”

Not all rosy

A number of miners have cut emissions via power solutions.

“Several producers made meaningful progress in shifting to lower-carbon energy sources during 2024,” Metals Focus said.

“Barrick and Newmont’s Nevada Gold Mines joint venture commissioned a solar facility projected to cut emissions by 234ktCO₂e annually, AngloGold Ashanti connected its Geita mine in Tanzania to the national grid and Kinross reduced diesel reliance at Bald Mountain.”

Australia’s Bellevue Gold (ASX:BGL) isn’t covered in the Metals Focus release, but announced at the Diggers and Dealers Mining Forum in August that it had become the world’s first ‘Net Zero’ gold miner.

It’s still using carbon credits to get to that status, and premiums for a traced sustainable bullion product aren’t yet covering those costs.

Metals Focus noted there remained challenges, with Kazakhstan’s Solidcore Resources losing access to its renewable power source. It’s now looking to have its own solar power operating at the Varvara mine next year and a second at Kyzyl in 2027.

Away from carbon emissions to other areas of ESG, total fatalities across the sector rose in 2024 from 24 to 27, reversing a two-year downward trend among the companies reporting to Metals Focus.

Over half came in deep underground operations in Africa.

As prices rose, government payments meanwhile lifted 11% to US$10.2bn, a 10-year high, while local procurement was up US$2.6bn to US$28.1bn, its seventh straight increase.

Those payments and returns are likely to extend even further this year amid gold’s bull run, with many analysts tipping prices could head beyond US$4000/oz from here.

Winners and losers

Here’s how ASX-listed precious metals stocks are performing:

Gold medal performers

Who were some of the top precious metals names this week?

Zenith Minerals (ASX:ZNC)

Gold prices soared this week but no one ran as hot as Zenith this week, after the junior struck 139.7m at 1.05g/t Au from 214.9m at its Red Mountain project in Queensland.

The thought is that Zenith is on the trail of a lookalike of the Mt Wright underground mine at Ravenswood, which delivered 9.8Mt at 3.35g/t Au for 1.1Moz.

It has been prosecuting the theory that a big intrusive related gold deposit sits at Red Mountain, a style where shallow base-metals-endowed rocks give way to high-grade gold at depth.

Only a high priority section of the core, with localised grades in small intervals ranging up to 37g/t, has been sampled yet, meaning more results are still to come.

Red Mountain is located inland from Bundaberg, near major gold deposits such as Mt Rawdon (2.5Moz), Cracow (2Moz) and Mt Morgan (8.5Moz).

Dreadnought Resources (ASX:DRE)

Previously best known as a rare earths explorer, Dreadnought has moved with the times to zero in on the historically high-grade Star of Mangaroon prospect in the Gascoyne region of WA.

This week’s big hit on Tuesday from 14 infill holes at the deposit included a strike of 15m at 20.5g/t Au from surface and another if 9m at 14.7g/t Au from 42m.

Star of Mangaroon contains a resource of 56,600t at 12.8g/t Au for 23,400oz.

Those grades shape as attractive for any nearby toll treater, with a new resource due this month and 5500m of drilling chasing depth and strike extensions, along with drilling at earlier stage targets, also starting this week.

“These intercepts have resulted in thicker and higher-grade intercepts across the lode and importantly, confirm that the high-grade lode comes to surface,” MD Dean Tuck said.

“These results are expected to positively impact on the current Resource, mine plan and project economics. The Resource update is well underway and expected in September 2025. The mine plan and a revised study will be completed soon after.”