Silver may be Thomas Kaplan's first love as he sees the potential for the precious metal to eventually push to $100 dollars; however, he is also not giving up on gold as he sees the yellow metal in the third-wave of a secular bull market that will take it "way past new highs." He noted that gold was in a strong uptrend well before the COVID-19 pandemic devastated the global economy. "All the pandemic has served to do is to make people now understand that the question of money and what is money when clearly it can be printed at will, he said. "The debasement of currencies is obviously very, very bullish for gold.”
We've been talking a lot about silver, but like you said, you're also really bullish on gold. I would love to get your outlook on gold. Uh, last time we talked, it was mines and money and you gave a macro picture on gold. Um, what do you see driving prices in the longterm? To me, gold is just simply an a bull market.
Um, if it looks like a duck and quacks like a duck and it tastes like a duck, it's a duck and gold is in a long-term bull market. It began in the early two thousands. Um, first wave took it from two 50 to 19 hundreds. We had a correction within the secular bull market. Um, and now we're. Embarked upon a third wave that will take it to way past new highs.
This is our reading of the subject. It has nothing to do even with macros. So I would argue that, uh, even before. Uh, COVID became a thing, um, over a year ago or not even a year ago. Um, gold had already, um, reached 1800. So gold was already in a bull market before the pandemic. And. To me all the pandemic has served to do is to make people now understand that the question of money and what really is money.
Um, when clearly it can be printed, uh, at will. And it used to be that a billion dollars here and a billion dollars there. And you were talking about real money as the old joke went well, now we're dealing with trillions. And the debasement of currencies is obviously very, very gold bullish. Um, but. I look at other indices to give me the underpinning that I'm looking for.
So I look at the golden district area itself and I see something that is very, very challenged. Now the good news is that I believe that gold companies will throw off massive amounts of cash and create, um, great dividends stories. Um, even if growth. Is much, much harder to come by. But what I see within this industry is something where you don't have new discoveries where the majors are burning through reserves faster than they can replace some risk.
Seeing that with Newmont, we're seeing that with Barrick, we've seen that with just about everybody. Um, And the truth is if you make a discovery today, it's probably going to take you 20 years to take it to the point where it's producing something maybe 10. So. If Barrack is right and silver production is declining by about 5% a year, um, for a number of years forward, um, we really are reaching a perfect storm because you have the decline in production, um, coinciding with a collapsing grades.
Over the last 10 years, the grade of the average gold mine coming into production is collapsed by 50%. And once you start getting into very lower grades, you become extremely, extremely dependent on, um, making technological bets. And I find that personally, I'm a little disserving. So, you know, we look for things which are big, um, and have high grade.
Um, either high-grade vein systems or, you know, the ultimate of course are great, huge open pits, um, with a few grams of gold, like we have at Donlin, uh, Nova goal, um, that's the ultimate, but there just aren't that many of them, I mean, you will not find, um, another Donlin anywhere with the possible exceptions to quite log in, uh, in Russia.
Um, but I'm not investing in Russia. I don't know very many people who intend to, um, but it's a great asset and we basically have the same thing in Alaska, which of course used to be rushing to college plenty. And it's probably the same geology anyway. Um, but that to us is, uh, is very, very meaning. Well, I was going to say so that's, that's Nova gold.
That's the Donlin project. Um, what, what's the timeline for that? I know, um, you guys just finished the biggest drill program in 12 years. Um, what's next for, for Nova gold and Donlin. Well, you know, we've had a couple of really great white swans, um, which have occurred over the last several years. Um, one of them of course, is, um, the advent of the Rand gold Barrick merger.
Um, and, um, there has been a definite. Um, warmth between our teams, which, you know, I jokingly say has more Barrack DNA than the Barrack team, but, um, the, the Nova gold team, um, many of whom hail from Barrack and Barrack, um, you know, under the leadership of Mark Risto, um, Mark is a renowned geologist in his own, right.
Um, and for him, everything begins. Um, with making sure that he absolutely meticulously understands the geology. So we have undertaken a program which is a follow on to a program that we conducted in 2017, where we encountered, um, Higher grades, um, and some really spectacular intervals. I think some of the best in the gold industry in that year, and Mark really wants to get to the bottom of all this and his attitude, I think is very reasonable.
Um, once we've got the geological model, right, and we have a new geological model, um, with Barrick that the last word, this pastoral program has been testing. Um, the drill results have been. Excellent so far. Uh, and so what that, what happens then is that gets calibrated, uh, with the new model. And once you have a model that you're satisfied with, then you can determine the size of the mine.
I think we know amongst ourselves what we expect the throughput to be. And once you've done that, then you go back and refine the CapEx. Um, and you know, their attitude and our attitude is this thing's going to be around for 50 years, maybe a hundred years. Uh, maybe more, um, the exploration potential there is probably better than.
Almost any other, um, mining project in the world. Um, and so I think we can look forward to a huge mind life. What we really want to make sure is that, um, it's built properly, um, from the content. And we're extremely excited because things seem to be working out exactly as. We'd hope that they would in terms of the drill program.
And so, you know, we're, we're excited. And I was going to say, you know, like a project with 39 million ounces, I mean, not, you know, you talk about declining resources, um, you know, miners not, uh, finding new ounces in the ground. This project is, I think you've described it as a category killer. I mean, at some point it has to get built well, You know, when I described Donlin as unique, um, I do so directly to institutional investors and I say, look, answer this question for me because I have plenty of capital to be able to deploy and new opportunities in the space.
Um, Helping me another project, which has started production at around 40 million ounces, um, where the grade is a multiple of where the grade is, um, in the industry. Now, the exploration potential is extraordinary. Those 39 million ounces are located on only three kilometers of an eight kilometer mineralized belt.
So we've always believed that the potential is for, um, excellent, um, results in being able to expand from 39 million ounces, um, to much more now take into account that that eight kilometer belt, um, represents only 5%. Of the land package, which has never been systematically explored outside of that belt.
And so when. Larry Buchanan who discovered sign for Stovall for us, um, said that, uh, the next online could very well be a Donlin. Um, that is really exciting, but that's not Parlin developed and I've often scribed and Mark hasn't stopped me from saying it that Donlin could be the new Nevada, the new Carlin, um, and you know, starting out with.
Um, you know, almost 40 million ounces take into account other resources closer to 50, um, with a grade that is over two grams, a ton, how much over we'll know shortly. Um, that is a category killer. Um, to me when you've got a big asset. With mine life where, because the grade is so good, the operating costs will be at the lower end.
Um, you really do have something which is wonderful. Now superimposed onto that, that it's located. In the safest jurisdiction in the world, Alaska is the second largest gold producer in a country, which still apparently very much adheres to the rule of law and where private property is, is sacred. And it's on native corporation land already designated by law for mining and the native corporations are, are.
Biggest allies. So when you have partners with them, you know, such an incredibly powerful major, like BA uh, Barrack, or, you know, your native corporation partners in Alaska, um, you're in really great shape. And you know, that is, to me, what makes is it unique? Because we have all the attributes of any of the, um, both deposits out there, but we're located in.
Um, a jurisdiction where when I go to sleep at night, I know that what I thought I owned the night before I still own. And as someone who made their bones and Bolivia's or bubbly South effort, prep, Congo, I could go on. I believe that that era is over. So Donlin for us. Because of its jurisdictional safety and other geological virtues is for us the Holy grail.
And I think that that will be a gift that keeps on giving for decades and decades to come. And that reason it really is, uh, you know, our flagship asset. I was going to say, you're giving me a lot to headline for this interview. Thank you very much for, for speaking with us today. The pleasure is all my nails.
Great to see you as always. Thank you for watching Kiko news for the latest in the precious metals markets, kiko.com.