Madneuli Website

Gold

There are two main kinds of gold deposits:

• Lode or vein deposits, where gold is found in cracks and veins in rocks.

• Placer deposits, which are formed by moving water that has eroded gold out of lode deposits. When the

speed of the water in a river slows sufficiently, the heavy gold falls to the bottom and accumulates in the

sand of the riverbed.

How it’s mined and produced

•    Gold can be mined underground or in open pits. It can also be mined as a by-product of copper and silver
         mining.
•    Gold is so valuable that it’s worth the effort to recover even minute amounts from copper ore.

How it’s used

    •    Gold's physical and chemical properties make it ideal for a number of applications. It's also very stable and
         doesn’t corrode or rust. Gold conducts electricity and heat very well — only silver is a better conductor of
         electricity.

• Gold is very malleable which means it can be hammered into shapes or even sheets so thin that light can pass
through it. It’s also ductile, which means it can be drawn into long, thin wires.

It’s mainly used in:

•    Dentistry and medicine.
•    Jewelry and arts.
•    Medallions and coins.
•    Ingots as a store of value. It’s also used for scientific and electronic instruments and as an electrolyte in the
       electro-plating industry.

Supply vs. demand

In 2006 total identifiable demand for gold fell 10% in terms of quantity compared to 2005. Gold supply was tight in 2006, falling 13% from 2005 levels to 3,451 tonnes. This was due primarily to a substantial reduction in net central bank selling and a sharp increase in producer de-hedging. In 2007 rising prices pushed gold price up. Investors used gold as hedge from inflation, thus prices rallied to $840 per ounce