Gold output expected to rise, Surbiton

Australian gold production is expected to rise in the coming months.

Australian gold production was steady in the March 2009 quarter and is expected to rise in the coming months, Surbiton Associates director Dr Sandra Close told MINING DAILY.

Surbiton Associates’ latest figures show that Australian gold production for the March quarter 2009 totalled 54.5 tonnes (1.75 million ounces), unchanged from the December quarter 2008 but 3% up on the March quarter 2008.

Dr Close said Oz Minerals’ long-awaited Prominent Hill copper-gold mine came on-stream during the quarter, Apex Minerals’ Wiluna and ATW Goldcorp’s Burnakura operations recently rejoined the list of producers and Avoca Resources’ Higginsville operation which is now treating higher grade ore, continues to ramp up output.

According to Dr Close, re-developed operations including Newmont Mining’s Boddington gold-copper mine will help output for 2009 exceed that of 2008.

Boddington mine is expected to produce around 31 tonnes of gold annually.

“At the moment, there are no operations slated to close in the coming months; however, there are several that are slated to open – including Boddington,” Dr Close said.

Dr Close said the higher gold output anticipated in 2009 should allow Australia to regain a higher ranking among the world’s top producing countries.

In 2008, China was the leading gold producer with 282 tonnes, the US was second with 229 tonnes, then followed South Africa with 220 tonnes and Australia with 219 tonnes.

“Annual Australian gold production has been on a downward trend since 1997,” Dr Close said.

“Last year Australia produced almost a hundred tonnes less gold than it did in 1997 and 100 tonnes of gold is worth around $4 billion at current prices.”

According to Dr Close, the Australian dollar gold price has been on an upward trend for the last nine years, with a record quarterly average of $1,371 per ounce in the March 2009 quarter.

An all time daily high of $1,547 per ounce was reached on 20 February but since then the Australian dollar had strengthened substantially against the US dollar, trimming the Australian dollar gold price back to around $1,220 per ounce.

Dr Close said that the current economic climate and the attractive gold price might actually encourage more companies to explore for gold in Australia, which has seen a significant reduction in gold exploration over the past decade.

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