Australia gold output recovers as prices hit record levels
Mon Sep 02 2024
According to Melbourne-based gold mining consultants Surbiton Associates, Australian gold mine production totalled 75 t in the June 2024 quarter, a rise of 5 t, or 7%, on the previous quarter.
Australian gold mine production totalled 297 t for the 2023/24 year, 10 t less than in 20/23. It was worth A$30-billion at the average daily gold price for the year.
Dr Sandra Close, a director of Surbiton Associates, said the June quarter saw gold prices reach record levels in both US dollar and Australian dollar terms, with many gold producers taking advantage of the higher prices to increase gold production and report record profits. She also added that subsequently, prices had risen further.
“US dollar spot gold prices reached a record $2 532 per troy ounce on August 20,” Close said. “The Australian dollar spot gold price spiked at $3 809/oz on August 2, when the Australian dollar exchange rate was lower.”
Close noted that it is not unusual for gold production to decline a little when prices increase, although there are two opposing courses of action that companies can adopt.
“At times of high prices, some operators deliberately reduce mill head grades by blending low grade stockpiled material with run of mine ore,” said Close. “In this way more gold can be mined from their deposits, thus extending the lives of their operations. Some profit is foregone up-front but the life-of-mine is longer.”
“Alternatively, since a dollar today is worth more than a dollar tomorrow, operators can choose to treat higher grade ore and realise greater early profits, even though some gold will be left unmined,” Close said.
Some excellent results have been reported for the 2023/24 year. West Australian gold miner Northern Star Resources, announced a full year net profit after tax of A$638.5-million (up 9.1%) and a dividend of A$0.25 per share, up 61%. Evolution Mining, a gold and copper producer, reported a net profit after tax of A$422-million (up 158%) and an increased dividend of A$0.05 per share, up from A$0.02.
Due to the extremely high rainfall in the March 2024 quarter, which severely affected production, operations reporting higher gold output in the June quarter outnumbered those with lower output by around three to one.
Australia’s largest gold producers for the full 2023-2024 year were, Newmont's Boddington and Cadia operations, with output of 626 000 oz and 458 700 oz, respectively, followed by Northern Star's Super Pit mine that produced 449 000 oz. Newmont's Tanami mine with its production o 448 000 oz is the fourth-biggest producer and AngloGold Ashanti/Regis Resources Tropicana joint venture with 428 000 oz is the fifth biggest.
Finally, Close, whose PhD thesis was written on the Australian gold mining industry and who has written two books covering the whole of the modern Australian gold boom, joined the critics of Federal Environment Minister Tanya Plibersek’s recent decision regarding the billion-dollar McPhillamys gold project near Blayney, New South Wales.
“Minister Plibersek’s ruling is a prime example of a politician shooting Australia in the foot, apparently for political reasons,” Close said.
“Gold alone is one of our largest single export earners. Just remember exploration dollars for all minerals can be redirected overseas if last minute decisions are imposed that seriously impact the viability of new mining developments in Australia.”
Source: https://www.miningweekly.com/