CARSON CITY — Gold production in Nevada fell to less than 5 million ounces in 2014, the first time since 1988 that output of the precious metal has dipped so low.
A new state Division of Minerals report shows 4.94 million ounces of the precious metal was taken from 30 Nevada mines in 2014. There was about 5.5 million ounces of gold produced in Nevada in 2013.
The peak year in recent memory was 1998, with just under 9 million ounces.
Richard Perry, administrator of the Division of Minerals, said it appears production has leveled off in the 5 million ounce range over the past five years. While production has fallen, Nevada mines still throw of gold valued at $5.5 billion, at $1,100 per ounce, he said.
"We need better gold prices to see more projects and new mining," Perry said.
The lower gold production is due largely to the price of gold, which hit a high of nearly $1,800 per ounce in 2012 but has dropped to about $1,100 as of Friday. This has curtailed mining exploration in Nevada which could bring new ore bodies on line and expand production.
But other factors weigh on production as well, Perry said. More of the gold now mined is refractory ore, which requires an additional process that boosts production costs and can also limit production.
John Dobra, associate professor of economics at the University of Nevada, Reno, said investment in the industry has slowed since gold prices began their decline in 2012.
"There is still a lot of gold in Nevada but not as much interest in going after it at these prices," he said in an email.
In 2013, Nevada accounted for 74.5 percent of all U.S. gold production and helped make the U.S. the third-leading gold producer in the world. Nevada accounted for 6.1 percent of world gold production, according to the Nevada Mining Association.
The biggest gold producer last year was Newmont Mining's Carlin Trend Operations, with 907,282 ounces, followed by Barrick Goldstrike Mines' Betze-Post operation, also in Northern Nevada's Carlin Trend, at 515,641 ounces.
While gold production declined in 2014, silver production actually increased, hitting 10.9 million ounces in 2014 compared to about 8 million ounces the prior year. But the mark was well below the peak years of 1988 to 2000, when production exceeded 20 million ounces. Silver is mostly a byproduct of gold production.
Some mines have closed because they cannot be profitable at the current price of gold.
Allied Nevada this summer suspended operations at its Hycroft Mine. The Humboldt County mine produced 214,000 ounces of gold in 2014.
Assemblyman John Ellison, R-Elko, said he remains optimistic that mining will continue to play a major role in Nevada. He cited the U.S Bureau of Land Management's recent approval of Newmont Mining's Long Canyon Mine east of Wells as a reason for his view. The project is the only significant major discovery in Nevada in the last decade.
Newmont expects to take 150,000 ounces of gold per year over the eight-year life of the mine.
"That will be a very big mine and the forecast is for a lot of reserves," Ellison said. "When you are chasing microscopic gold it takes a lot of money to get it out."
If gold prices go lower there could be further slowdown, he said.
"But mining has always been an up-and-down industry," Ellison said. "I think the price will come up again and Nevada will have a long life with mining."