Australian gold output hits all-time high

Australian gold production has reached an all-time record of 321 tonnes (10.3 million ounces) in the past financial year, according to gold mining consultants, Surbiton Associates.

With the gold price sitting around record territory in Australian dollar terms, the country-wide output is worth close to $23 billion to local gold miners.

Australia’s 2018-2019 financial year gold production compares with the 310 tonnes produced in the previous fiscal period and 317 tonnes in the 2018 calendar year.

The achievement was driven by a bumper June 2019 quarter where gold production totalled almost 82 tonnes, making it the highest quarterly production for more than 20 years.

“Reporting yet another record gold production is good but becoming rather repetitive, with Australian dollar gold prices near record levels, the 2018/19 output is worth almost $23 billion a year at current prices,” Surbiton director Sandra Close said.

Alongside being the world’s second largest gold producer, Australia also imports a considerable amount of impure gold each year for refining.

Since Australian domestic consumption is relatively small, the additional imported gold, once refined, boosts the export tonnage and value even further.

“The outlook for Australian gold production seems positive, however, many things can happen, I can’t predict the future and am very conscious of the many factors and uncertainties that affect gold prices, exchange rates and production,” Close said.

Newcrest Mining’s Cadia underground operation in New South Wales was the standout producer during the period with more than 910,000 ounces.

Cadia’s output was well ahead of Australia’s second largest mine, Newmont Goldcorp’s Boddington operations, which produced around 690,000 ounces.

The Gruyere joint venture in Western Australia between Gold Fields and Gold Road Resources also joined the list of Australian gold producers in recent weeks.

Gruyere, which cost around $620 million to develop, will produce around eight tonnes of gold a year when in full production.

“Higher production is also expected from Royal Nickel’s operations at Beta Hunt and its newly acquired Higginsville plant in Western Australia, while Kirkland Lake’s Fosterville mine in Victoria continues to build up output to around 600,000 ounces of gold in 2019,” Close said.

The Fosterville mine has reported an extraordinarily high grade, averaging 39.9 grams per tonne of gold for the June quarter, which is almost 1.3 ounces per tonne.

Fosterville’s performance is drawing parallels to the grades seen in some of the famous old mines over a century ago.

Turning to the Victorian Government’s recent announcement that it would impose a royalty on gold production, Close said it appeared that it had not been properly thought through.

“Let me stress that I am in favour of royalties on the production of minerals which are owned by the people of the state, however, royalties are an additional cost burden on production and need careful and sensitive consideration, to ensure the outcomes are of overall benefit,” Close said.

“While I appreciate Victoria has not imposed a gold royalty to date, to announce its imposition without warning was difficult to understand.”

Australia’s largest gold producers for the 2018-2019 financial year:
Operation                   Ounces            Owner
Cadia                          912,778           Newcrest Mining
Boddington                689,000           Newmont Goldcorp
Tanami                        525,000           Newmont Goldcorp
Tropicana – JV           518,172           AngloGold Ashanti 70%, Independence Group 30%
Super Pit – JV            490,000           Newmont Goldcorp 50%, Barrick Gold 50%

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