Newmont says gold discoveries getting tougher

PERTH (Reuters) - Discovering the next mother lode is not as easy as it used to be, the world's second-largest gold producer, Newmont Mining Corp (NEM.N: Quote, Profile, Research) said on Wednesday, as it plans to spend nearly a quarter of a billion dollars on exploration this year.

There has been shrinking number of gold finds above five million ounces, Newmont's general manager for Australia Adriaan van Kersen told a gold mining conference in Perth.

"Newmont depletes its reserves at 10 ounces a minute and needs a replacement discovery rate of near 14 ounces a minute," van Kersen said.

Newmont counts about 86 million ounces of gold in reserves at its mines worldwide and has earmarked between $220-230 million for exploration in 2008, he said.

"Exploration is not only becoming tougher and riskier but more expensive and it is becoming more and more difficult to find gold in any surface quantity," van Kersen said.

Van Kersen, cited Newmont's lack of a big discovery recently as indicative of the plight of the gold industry as the whole.

Only 4 percent of gold deposits in the world hold more than five million ounces in reserves, he said.

"As an industry, we are spending more and more on exploration but even in a high demand and high price environment, and more drilling happening, the gold sector is not discovering the same ounces as it used to," van Kersen said.

At the same time, costs for everything from buying trucks and fuel to hiring workers, up 24 percent in the last year, are biting into operations, he said.

Newmont plans to mine between 5.1 million and 5.4 million ounces of gold this year, he said.

World No. 1 gold miner Barrick Gold Corp (ABX.TO: Quote, Profile, Research) said recently it held 124.6 million ounces in reserve as of December 31, 2007 and would spend $200 million exploration in 2008.

(Reporting by James Regan)