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Australian gold producers hit an all-time production record in 2018. Australia produced 317 tonnes of gold in 2018, breaking the previous record of 314.5 tonnes set  21 years ago. Gold prices timed the opportunity for Australia with an all-time record of AUD 1876 per ounce on February 20.

Australian Gold Production and Resources

Australian gold production hit 81 tonnes in the December 2018 quarter, the third consecutive quarter where output was greater than 80 tonnes. The gold price averaged $1711 an ounce in the December quarter. The Australian gold sector has bounced from the nadir of just 220 tonnes in 2008 with the global financial crisis.

The weakening of the Australian dollar against the US dollar has helped the producers from dalling from around AUSUSD 1.10 to near US 70 cents since. Gold has so far averaged around $AUD 1820 per ounce in 2019 as the Austrralian dollar hovers around $AUDUSD 70.00.

Australia’s largest gold producers in 2018 were:

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  • Cadia 751,965 Newcrest Mining
  • Boddington 709,000 Newmont Mining
  • Super Pit 628,000 Newmont Mining (50%, Barrick Gold 50%)
  • Tanami 496,000 Newmont Mining
  • Tropicana 477,908 AngloGold (70%),
  • Independence Group (30%)

In Australia over the last four decades, both the resources inventory and gold production have risen significantly. In 1975, annual gold production was 16 t which rose to 292 t in 2017, an increase of almost 1700%. Gold EDR has increased 6368% over the same time period and total resources of gold (EDR + Subeconomic + Inferred) have increased 5773%.

The EDR of gold has risen steadily from 1983 (394 t) to 2017 (10 070 t) with only relatively minor falls of short duration. This rise in EDR corresponds to a period of sustained exploration expenditure averaging approximately $500 million per annum and of improvements to extraction technologies including carbon in pulp, carbon in leach and the treatment of refractory ores.

Increases in reserves, resources and production over the last decade are not as dramatic but still significant, with gold EDR in particular rising strongly (72%). This is largely the result of favourable exchange rates raising the gold price in Australian dollars which has invigorated exploration in the gold sector as companies look to increase resource inventories. Much of this exploration expenditure was targeted at upgrading resources around existing deposits, especially converting Inferred Resources into higher resource categories.

Australian gold production expected to surge higher

Surbiton Associates director Sandra Close in a note on gold production said:

“On the production front, Gold Fields and Gold Road’s Gruyere joint venture, some 200 kilometres north-east of Laverton will start up mid-year Production is scheduled to ramp up to around 300,000 ounces (or some 10 tonnes) annually at full capacity."

"Fosterville (in Victoria) will become a significant producer in 2019, as Kirkland Lake has just announced its output should rise from around 350,000 ounces in 2018 to some 600,000 ounces in 2019. Its average grade was an extraordinary 40 grams per tonne in the December 2018 quarter."

"Newcrest’s Cadia operation in New South Wales was the largest producer in 2018 at just over 750,000 ounces, followed by Boddington, Western Australia at around 710,000 ounces. "

Super Pit output fell to just under 630,000 ounces for 2018, following the pit wall failure in May,” Close said. “It dropped out of the list of the quarter’s top five gold producers for the first time since Surbiton began its quarterly gold survey over 25 years ago.”

Source: Australian Bureau of Statistics, Geoscience Australia. Australian Mining

From a Sunburnt Country

From The TradersCommunity Research Desk

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