Australian gold levels jump

The world’s second largest gold mining nation, Australia, saw gold output rise in the June quarter according to a survey by Melbourne-based consultancy, Surbiton Associates.

Gold production for the period totalled some 72 tonnes (2.31 million ounces), an increase of almost three tonnes or four per cent over the March 2015 quarter. With most Australian miners having June year-ends, Surbiton puts the fiscal year total (to end-June) at 285 tonnes.

In Mineweb’s analysis of global gold output in calendar 2014, derived from figures from London-based consultancy Metals Focus, China was the world’s leading producer that year with annual output of 462 tonnes with Australia second, just ahead of Russia, with a little over 272 tonnes.

So the latest Surbiton figures suggest Australian gold output could well be heading strongly higher in calendar 2015. (See: Gold’s top 20 – mines, miners and countries).

China is also believed to be producing more gold this year than last. This bears out the view that lower gold prices are not yet having a diminishing effect on total world gold output, which is seen as continuing to rise in 2015, perhaps plateauing next year.

However such rises are perhaps more than being balanced out by a continuing fall in production from scrap.

Surbiton Director, Dr Sandra Close, puts the increase down primarily to some of Australia’s biggest miners processing more on-surface stockpiles and thus producing more gold.

The Kalgoorlie Super Pit (operated by Newmont and Barrick Gold and is Australia’s second biggest gold mining operation) raised gold output by 44,000 ounces in the quarter.

Australia’s biggest mine, Boddington, lifted output by 17,000 ounces, as did Tanami. (Both these operations are managed by Newmont Mining of the U.S.)
There were also some significant mining operations producing less gold in the quarter – the Surbiton report noted a 20,000 ounce fall at St Barbara’s Gwalia operation, and a 9,500 ounce drop at Gold Fields’ St Ives mine.

And of the big byproduct gold miners, BHP’s Olympic Dam suffered a mill outage that reduced gold output by 17,000 ounces.

Dr Close also commented that the weakening Australian dollar was proving a great benefit to the local gold mining industry, with the price in Australian dollar terms being relatively stable since the start of 2015. The strength of the US dollar has meant the gold price has actually risen in Australian dollars since the beginning of the year as is true for most other gold producing nations other than the USA and China.

“I often wonder, Dr Close said, “why local investors place so much importance on the US dollar gold price. It is the Australian dollar gold price that matters to local producers as their costs are mostly in Australian dollars".

"Focus on the margin. I find it quite bizarre to see the share prices of Australian-domiciled gold producers fall in response to a decline in the US dollar gold price when, due to a change in the exchange rate, the Australian dollar gold price has actually risen.”

Surbiton ranks the top Australian gold mines by production as follows:

2015 June quarter output

OperationOuncesOwner
Boddington201,000Newmont Mining Corp
Super Pit – JV162,000Newmont Mining Corp 50%, Barrick Gold Corp 50%
Cadia East137,748Newcrest Mining Ltd
Telfer116,257Newcrest Mining Ltd
Tanami116,000Newmont Mining Corp

 

And for the 2014-2015 financial year

OperationOuncesOwner
Boddington739,000Newmont Mining Corp
Super Pit – JV606,000Newmont Mining Corp 50%, Barrick Gold Corp 50%
Telfer520,309Newcrest Mining Ltd
Tropicana493,378AngloGold 70%, Independence Group NL 30%
Cadia East440,037Newcrest Mining Ltd

Source: Surbiton Associates

 

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