mickey fulp says gold is becoming harder to find, and there has only been one great discovery in recent years (and we all know what that was.)

Only a tiny handful of huge gold discoveries has been made worldwide in the last decade, which experts say is because virtually all the juiciest low-hanging fruit has been picked some time ago. And this new reality promises to help edge bullion prices increasingly higher.

The scarcity of world-class gold discoveries is already taking a toll on the mining industry's bottom line. Global gold output has been dwindling by nearly 5% per annum since it peaked in 2001, even though bullion's spot price has more than tripled since then.

An even more pronounced downward trend can be seen in North America. This is where output has dropped over the last decade from 17.06 million ounces in 1998 to 10.59 million ounces in 2008.

Part of the problem is that historically gold-rich territories like eastern Canada's Abitibi Greenstone Belt and Nevada's fabled Carlin Trend have failed to yield any monster gold finds in recent years, according to Mickey Fulp, a geologist and exploration/mining analyst who has over 30 years of mineral exploration experience all over the world.

Fulp runs the mining investment newsletter www.mercenarygeologist.com. "Geologists are running out of virgin geological terrain that is prospective for the discovery of giant outcropping ore bodies," he says. "Much of the earth has already been trod many times by exploration geologists."

Fulp adds that the gold exploration sector is now being forced to venture into some of the world's last geological frontiers - often emerging democracies that are typically fraught with geopolitical risk. They include Mongolia where one of the rare world-class gold discoveries of the last decade has struggled to make headway due to the procrastination of the Mongolian government. (Jointed owned by Rio Tinto and Ivanhoe Mines, the Oyu Tolgoi gold/copper deposit finally got the green light to proceed to the mine development stage earlier this month after at least six years of political wrangling).

Yet, the high stakes lure of huge gold finds in far-flung exotic lands has always held a potent appeal for investors who love to gamble. Hence, the mining industry's junior ranks (explorers and developers, rather than mine builders) tapped into Canada's venture capital markets for a princely Cdn. $37 billion during the metals bull market of 2003-2008. This is according to another newsletter writer and mining analyst, John Kaiser, the editor of www.kaiserbottomfish.com

In spite of this flood of speculative money, Kaiser points out that only one epic new gold discovery has been made during the last 6-7 years. Found in 2006 by a tiny Canadian mineral explorer called Aurelian Resources, the rich Fruta del Norte deposit in Ecuador now hosts an estimated 13.7 million ounces of high-grade gold and 22.4 million ounces of silver.(Notably, this mine may not come on-stream within the next several years due to political meddling by the left-wing Ecuadorian government).

http://www.321gold.com/editorials/davis/davis102109.html