Who's the biggest gold producer?

Though the company only turned 25 years old in 2008, Barrick Gold Corp. is the world's largest producer of gold by several measures of size.

It certainly produces the most ounces, with its various mines turning out 7.66 million ounces in 2008. It certainly is most profitable as well, with an operating cash flow of $2.21 billion in that year, seeing that figure 27 percent over 2007 in a time when most of the world's companies were contracting rapidly.

Barrick is pretty much a pure gold company. In fact, it turned down the opportunity to invest in a major gold property in Mongolia recently because it felt that too much of the property's value was attributable to copper rather than gold.

The Toronto-based miner, like most major resource companies today, gets its gold from mines in diverse regions around the world. Its first big mines, where it got its start 25 years ago, were in Nevada and it still produce quite a bit of gold from that state. (A little over 3 million ounces of its production came from North America in 2008, with most of that coming from Nevada.)

Mines on other continents

But it moved rapidly into South America as well, and today has production in Peru and Chile and is developing mines in Argentina and the Dominican Republic. (About 2.1 million ounces of production came from South America in 2008.)

It also mines gold in Africa and the Australia-Pacific region.

While many mining companies develop a "balance" in many parts of their operation -- base vs. precious metals, underground vs. surface mines, mining vs. refining -- Barrick works to achieve a geopolitical balance. Most of its mines are in stable political jurisdictions, but it also is willing to pioneer development in regions that may be more challenging, such as Africa.

Barrick currently is producing gold from 27 operating mines on five continents. It is developing several more, some as replacements and some for growth, from its in-the-ground reserves of 138.5 million ounces.

With relatively low operating costs, and huge reserves, Barrick is likely to do nothing but stretch out the amount by which it leads the gold-mining race.

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Where does newly mined gold come from?

Where does most of the world's gold come from?

The old answer, last year's answer, was South Africa. For years, the deep (some more than 2 miles beneath the surface) mines of this nation provided a lion's share of the world's newly mined yellow metal. And they're still significant.

But last year, electric power shortages cut back on South Africa's output and that nation was replaced in the No. 1 position by a quickly rising new producer: China.

Yes, China is rapidly becoming a major producer of many metals, though it also buys metals and ores from other nations. In gold, it has reached the pinnacle and has done so through many small mines rather than a handful of larger ones.

In second place is the United States, with most of its production coming from primary mines in Nevada. (Primary means that gold is the major product of the mine, rather than being a byproduct from a copper or silver mine.)

Nevada's current gold boom began in the 1960s and is still growing strong. Most gold from Nevada exists in the form of microscopic particles that can only be economic to mine because of the vast amounts of rock that can be moved using enormous equipment, including haulage trucks that can move 320 ton of rock or waste at a time.

Couldn't have been mined in 1800s

An interesting point about Nevada's current gold production is that it comes from ore that the '49ers, on their way to California in the middle of the 19th century, probably camped on, but didn't have the tools to know what they had.  Neither did they have the tools to mine the fine grains even had they known.

Most of the gold around the world is mined from deposits like this today. It's all stuff that couldn't have been profitable without modern technology and large-scale production methods.

The next big producer is South Africa, followed by Australia. In many ways, Australia is much like Nevada in terms of mining. Large open-pit mine provide most of the gold from desert regions that aren't used for much else.

Many nations today are looking at their gold resources in the group as a way of earning foreign exchange or employing local residents. And these resources, currently unknown, will satisfy the increasing world gold demand of decades to come.

Here's a report on how to buy gold for less than market price.