PERTH (miningweekly.com) – Australian gold production increased by 7 t in the last quarter of the 2021/22 financial year, Melbourne-based gold mining consultants Surbiton Associates reported.

Output for the June 2022 quarter totalled 83 t, a 9% improvement on the 76 t recorded in the March 2022 quarter. This brings Australian total gold mine production to 317 t for the financial year ended 30 June 2022, worth around A$26-billion.

“The industry treated about five-million tonnes more ore in the latest quarter than in the previous three-month period,” said Surbiton director Dr Sandra Close.

“Producers seem to have taken the opportunity to end the financial year on a high note, by pushing their treatment plants a little harder and treating higher grade ore.”

Two new projects came on line during the quarter. When in full production these could add more than 10 t of gold output a year. One is ASX-listed Red 5’s King of the Hills mine in Western Australia, which produced around 9 500 oz of gold in the month of June, treating only low-grade material. At Calidus Resources’ Warrawoona project, also in Western Australia, 10 000 oz were produced since treatment began in May.

“I visited Red 5’s King of the Hills project in late July and it certainly is impressive. With a capacity to treat 4.7-million tonnes of ore a year it is the biggest new project to come on stream in recent years,” Close said.

The increase in total June quarter output came about in spite of continuing problems with the shortage of skilled workers and absenteeism resulting from Covid-19 infections. Close noted, however, that input costs are rising, leading to higher costs throughout the industry.

“Beacon Minerals operates the Jaurdi/Lost Dog gold project southwest of Kalgoorlie. In the last year, the company estimates the cost of fuel rose 58%; cyanide had risen 95%; grinding media was up 43% and explosives had risen by 56%.”

Once again Australian gold producers benefitted from a weaker Australian dollar compared with the US dollar in the June quarter.

“Local investors should always take note of the gold price in Australian dollars because producers’ costs are mostly in Australian dollars. In the second quarter of 2022, the US dollar price of gold fell by $125/oz but the Australian dollar gold price actually rose by almost A$42/oz due to a $0.06 movement in the exchange rate,” said Close.

As most of this gold is exported, the gold mining industry is an important contributor to Australia’s total foreign exchange earnings.