Australian gold output up by 10 per cent

Cost cutting and a move to higher grade ores has seen Australia’s gold production rise 10 per cent over the past twelve months.

Melbourne-based Surbiton Associates said around 9.1 million ounces of gold was produced in the 2013-14 financial year.

Surbiton’s Sandra Close said mining firms had been targeting high-grade ore in light of lower gold prices, and this was reflected in the increased output.

But Close warned this tactic could lead to shortened mine lives in years to come, ABC reported.

"The majority of this rise in production is due to an overall increase in ore grades and the industry is definitely responding to the harder times with price,” Close explained.

"While this has led to higher overall gold production, it means lower grade material is left in the ground or stockpiled, so that over time reserves are reduced and mine lives are shortened."

Close said miners who are unable to chase higher ore and keep costs down may not be sustainable over time.

This year has seen a host of gold mines shut up shop as high production costs and low gold prices meant the continuation of mining was unfeasible.

Silver Lake Resources shut its Murchison gold mine in March, shedding 127 jobs.

While Central Norseman Gold placed all three of its West Australian mines into care and maintenance following revelations the company had incurred a loss of $3.2 million over 6 months.

Unity Mining also announced plans to close its Henty gold mine next year, affecting 150 workers.

However Close was quick to point out these shut downs had been replaced with several brand new gold operations.

"As well as Tropicana, new operations in 2013-14 included Doray Minerals' Andy Well and Regis Resources' Rosemont, both in WA and Alkane Resources' Tomingley project in NSW," Close said.

Close recently suggested that gold was often overlooked as a massive export earner for Australia.

“Although gold’s export value is less than that of iron ore or coal, it is worth more than export earnings from meat, almost double the export earnings from wheat, and four times the earnings from wool,” Close explained.

The comments came as Surbiton released data which revealed Australian control over its domestic gold industry rose to around 50 per cent as overseas firms sold their stakes to local companies.

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