PERTH (miningweekly.com) – Australia’s gold production reached its highest level in 12 months at the end of 2015, with the country producing 285 t of gold, nearly 2 t more than in 2014.

Mining consultancy Surbiton Associates reported over the weekend that gold production during the December quarter reached 73 t, which was up from the 72 t produced in the previous quarter.

“For 2015, Australia’s gold production of 285 t was worth over A$14-billion at the average gold price, that’s good news”, said Surbiton director Dr Sandra Close.

“Once again the local gold sector has benefited from weaker US dollar exchange rates.”

Close noted that throughout 2015 the US dollar gold price slowly declined to around $1 050/oz near year-end, although since the start of 2016 it has recovered quite rapidly to over the $1 200/oz mark. By contrast, the Australian dollar gold price remained relatively stable during 2015, averaging A$1 540/oz, while since January it has risen to over A$1 700/oz.

“The Australian dollar has fallen from near 95c in mid-2014, to around 82c at the start of 2015, to around 72c by end 2015. Such a significant devaluation has provided quite a boost to the Australian gold sector, as well as to other exporters,” Close said.

“I wonder if investors are aware that the Australian dollar gold price, at around A$1 700/oz, is only about A$100/oz less than the all-time record Australian dollar gold price reached in August 2011,” Close said.

She said that the lower oil and gas prices had reduced the cost of energy in both the mining and processing phases of the industry and that the end of the “mining boom” had reduced pressure on wages and led to lower contract rates for mining and ore haulage.

“If you factor higher prices and tighter cost containment into the overall equation, margins have increased. Much of the local gold sector is travelling quite well for the moment.”

She noted that there had been recent overseas commentary that Australian gold producers were being squeezed by high costs.

“Such comments are typical of US-centric observers who fail to appreciate the effect of weaker local currencies on the economics of gold production, whether in Australia or in other gold-producing countries outside the US,” she said.

Close said a number of mothballed operations were currently being brought back into production, which should help boost Australian gold output in the near future. In addition, there was increasing toll treatment of ore by small companies.

Metals X is ramping up its rejuvenated Murchison operations, near Meekatharra, to an ultimate output of 200 000 oz/y, while Saracen Mineral Holdings poured the first gold at the reopened Thunderbox mine, which would deliver 150 000 oz/y, and Blackham Resources was expected to bring its 100 000 oz/y Wiluna operation back into production mid-year.

While Newcrest Mining will soon place its Ridgeway mine on care and maintenance, it will probably use the spare milling capacity to treat additional higher-grade Cadia East ore, Close said.

“We have seen the usual ups and downs in output for individual operations in the December quarter. Both Tanami and Super Pit reduced output by around a tonne each, compared to the previous quarter, but on the other hand, production at Telfer, Tropicana and St Ives was considerably improved.”