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Mining News Pro - Australian gold production fell by 10 tonnes, or 12 per cent from the previous quarter during the March period, according to gold consultants Surbiton Associates.
This is worth over $800 million against current prices.
Australia’s gold miners produced 77 tonnes of gold, compared with 87 tonnes in the December 2019 quarter, which was the highest quarterly output to date.
Surbiton Associates director Sandra Close however said that the reduced output was “no cause for alarm”. She believes that record Australian dollar gold prices are a “significant contributing factor”.
“It is no great surprise that the March quarter 2020 gold production is down,” Close said.
“Many operators are taking advantage of the extraordinary rise in Australian dollar gold prices through 2019 and early 2020.
“The March quarter 2020 saw a sector-wide reduction in both grade treated and tonnes treated compared with the previous quarter and there was one less day in the period.”
At a time of prolonged high prices, many operations have reduced the head grade of ore being treated where possible. This still yields good profits because of the higher gold prices.
The strategy extends the life of mines and leaves less gold in the ground, resulting in higher operating costs per ounce.
Australia reached an average price of $2410 per ounce during the March quarter, in contrast with $1831 per ounce in the prior corresponding year, highlighting a rise of over 30 per cent.
“The US dollar price has also risen over the same period but only by around 21 per cent by comparison, as the Australian dollar price has had the added benefit of a lower exchange rate,” Close explained.
“We saw the same effect of prolonged higher prices reducing production when the Australian dollar gold price rose substantially over several years, to reach more than $1599 per ounce in 2011 and 2012.
“Although at that time, the Australian dollar and US dollar were around parity.”
Close also added that the coronavirus pandemic has had a minimal effect on gold production, as most mines remained operating, with 70 per cent of Australia’s gold production coming from Western Australia.
“The gold mining industry and mining industry in general have handled the problems associated with the coronavirus threat very well,” she said.
“Some operators reorganised rosters and some fly-in fly-out (FIFO) employees are working for extended hours of duty in order to reduce movement of personnel.”
Australia’s top five gold producers for the March quarter were:
-Cadia East, New South Wales (Newcrest Mining) – 195,181 ounces
-Fosterville, Victoria (Kirkland Lake Gold) – 158,864 ounces
-Boddington, Western Australia (Newmont Goldcorp) – 142,000 ounces
-Super Pit, Western Australia (Northern Star/Saracen Mineral Holdings) – 117,127 ounces
-Tanami, Northern Territory (Newmont Goldcorp) – 116,000 ounces
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