Australian gold production achieves all-time highs

The Cadia site. Image: Newcrest Mining.

Australian gold production reached an all-time record of 325 tonnes last year, with a particularly outstanding December quarter, according to Surbiton Associates.

Gold production during the December period hit a record quarterly output of 87 tonnes, exceeding the previous record of 82 tonnes in the June quarter last year.

The record quarters were responsible for the yearly all-time high, with eight tonnes more than the previous record of 317 tonnes in 2018.

Surbiton Associates director Sandra Close said this was due in part to new projects coming online and steady increase in output.

“In addition to 2019 having the highest ever gold production in Australia, the December 2019 quarter was really outstanding,” she said.

“The record output was due to new projects coming on stream and ramping up production, other operations recovering from poor performances in the September quarter and some increases in throughput and grade.”

This includes Newcrest Mining’s Cadia East mine in New South Wales, which produced 68,000 ounces more gold than in the previous quarter.

In the same period, Gold Fields lifted its production at the St Ives operation in Western Australia by 32,600 ounces.

“Kirkland Lake Gold’s Fosterville mine in Victoria continues to shine,” Close said.

“It reported an average of an extraordinary 49.3 grams per tonne gold for the quarter, resulting in an increase in production of 33,600 ounces, making it now Australia’s third largest operation on a quarterly and annual basis.”

The Gruyere joint venture in Western Australia also ramped up rapidly to reach its full rated capacity, with an output of 70,000 ounces in the December quarter, an increase of 41,000 ounces on the September quarter.

Surbiton noted that the local gold producers had been making the most of rising Australian and US dollar gold prices in 2019.

“The Australian dollar gold price averaged a record $2168 per ounce in the last three months of 2019, due to a higher US dollar gold price and a weaker Australian dollar exchange rate,” Close said.

“Since then the Australian dollar gold price has continued to rise, hitting a record high of $2529 per ounce on 24 February 2020.”

Close added that at a gold price of $2400 an ounce, gold became a major export earner in Australia, with the value of the 2019 output exceeding $25 billion.

“Gold retains a certain safe-haven status and its price often rises with uncertainty,” Close said.

“In addition to various economic and political concerns in 2019, lately we are also seeing a reaction to the coronavirus outbreak and its effect on industrial activity in China, plus its effect on the economies of other countries and the impact of reduced global travel and tourism.”

Several small operations in Victoria are also grappling with the negative effects of a newly imposed gold royalty, with others recording a poorer performance, according to Surbiton.

Aurelia Metals’ Peak mine near Cobar, New South Wales was down in production by 15,000 ounces during the December quarter.

Evolution Mining’s Cowal mine in New South Wales and Mt Carlton mine in Queensland also produced 11,000 and 12,000 fewer ounces respectively.

Super Pit produced significantly fewer ounces than usual as the impact of the 2018 wall slip continued on.

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