Gold prices have hit new record highs almost every month in the past year, with global conflicts and economic insecurity seeing investors flock to the precious metal.

While gold producers are selling their product for never-before-seen prices, investment has not been flowing to those looking to develop new mines.

Association of Mining and Exploration Companies chief executive Warren Pearce has described it as an "unusual situation" that has not occurred in about 50 years.

Gold bullion prices have risen by over 35 per cent this year, reaching $4,240 per ounce on Thursday. 

The biggest gold producer on the Australian stock market, Northern Star Resources, has a market capitalisation of nearly $16 billion, with its share price up nearly 50 per cent in the last year.

However, the investment being pumped into the big gold producers has not been trickling down to smaller companies exploring for gold.

Producers profiting, explorers struggling

Mr Pearce said it had been a "difficult period" for gold explorers.

"Since the start of 2023, it's been very hard to attract exploration investment into the gold sector, which is really surprising because the gold price through that period has been exceptionally strong," he said.

"For the first time in about 50 years, the line between the gold price and investment in gold equities has diverged, normally it tracks very, very closely.

Gold industry veteran Sandra Close said the lack of investment in smaller gold producers was "interesting", given the soaring value of the commodity.

"I would have expected a bit more interest [in explorers] but investors minds might be on other commodities," Dr Close said. 

"Exploration doesn't happen overnight.

"Even if the market goes rip-roaring and the gold companies are able to get investment funds from the market, exploration takes time and patience before you do end up with a deposit."

Mine with huge reserves unable to attract investment

The Mount Todd gold mine, 300 kilometres south-east of Darwin, has not operated since the early 2000s but still contains huge gold reserves.

Its owner, Canadian company Vista Gold, estimates it holds about 10 million ounces of gold and calls it "one of the largest development-stage opportunities in Australia", capable of producing 500,000 ounces of gold per year.

Despite gold prices more than doubling since 2019, the company has not been able to restart mining.

"The issue that we've had to date is that the project hasn't been able to attract funding," Vista Gold Australia's managing director Brent Murdoch said.

Part of the problem is that Mount Todd has so much gold that restarting production at full capacity would cost a huge amount of money — about $1.3 billion.

"The issue is the tier-one mining companies are hesitant about developing greenfields gold projects," Mr Murdoch said.

"It's only tier-one-sized companies that can help with a project of the size that we've put to the market for Mount Todd."

So, Vista Gold is putting forward a proposal to build a smaller-scale mine, which could produce about 200,000 ounces of gold per year.

"We think the lower capital that's required to develop that means that we'll be able to fund the project," Mr Murdoch said.

"We think we can get hundreds of companies to help us with that [smaller proposal], and it's a much more likely prospect to go into production.

"We hope by the end of the first quarter next year to be able to put out a [mine proposal] that is extremely attractive to the mid-tier sector of the mining industry."

A smaller mine at Mount Todd would cost about $500 million to develop and employ about 300 people.

"It will be developed, we just need to fashion it in the right manner for the market to get it up on its feet."