Gold producers at the 2014 Paydirt Australian Gold conference have indicated a strong need to lower gold production costs down to $1000, given the prospect of upcoming economic conditions.
Northern Star Resources managing director Bill Beament said that although the company has a good record for maximising productivity and efficiency, the overall sector needs to address the expectation for improved cost performance in the upcoming market climate.
“We are aiming to achieve an all-in sustainable cost of $1050 per ounce on average across our four mines and this now includes reviewing all supply contracts and leveraging off the company’s buying power so that we reduce the total site cost per ounce,” Beament said.
“We also plan to rationalise and standardise our fleet, assets and personnel across the company as it will be critical mass that provides the best platform for achieving new and lower cost profiles per ounce.
“This will be increasingly critical from a cashflow, low debt and dividend perspective as we continue our drive to lift total production from 350,000 ounces currently per annum to in excess of 500,000 ounces.”
Beament described Pegasus as “one of Australia’s best gold finds of the past 10 years”.
The deposit has a current potential tipped to exceed one million ounces.