PERTH (miningweekly.com) - Australian gold production in the September quarter declined slightly to 81 t, down 4 t from the 85 t produced in the June quarter, gold mining consultants Surbiton Associates has reported.

The decline in gold production was mainly owing to lower production at some of Australia’s largest gold mines.

“The total value of Australia’s mined output of gold was little changed, despite the reduction in tonnes of gold produced in the quarter,” said Surbiton director Dr Sandra Close.

“Australian gold production was worth a little over A$7-billion at the average Australian gold price for the three-month September quarter. That is equivalent to around A$28-billion a year.”

Dr Close said that Australian dollar gold prices averaged around A$2 670/oz in the September quarter, with the Australian dollar averaging $0.73 for the period.

“The weighted average cash cost of production was less than half the average gold price, indicating that many gold producers have enjoyed healthy profit margins. However, because fewer ounces were produced, weighted average cash costs and all-in sustaining costs (AISC) rose.”

“For the January to September period in 2020, Australian gold production totalled around 244 t. So output for the full 2020 year should be close to, or may even exceed, the record of 326 t set in 2019. Often the December quarter has the highest production of the year,” Close said.

Market interest in the gold sector remains high and this has also been reflected in greater exploration expenditure and activity, she added.

“Many exploration and producing companies are taking advantage of buoyant gold prices and the greater interest in the gold sector, to raise additional funds from shareholders. The increased drilling activity and property deals are leading to some excellent gold discoveries but not all of these will become new gold mines.”

Close said it takes time and money for a discovery to be evaluated and a resource established, even before a feasibility study can be undertaken to assess whether it is an economic proposition with a sufficiently high expected return. Only then can a company commit to development and it also needs to be able to raise sufficient funds.

Amongst the promising discoveries are De Grey’s Hemi project, 80 km south of Port Hedland and the Newcrest/Greatland joint venture’s Havieron project, 45 km east of Telfer. Another is Stavely Minerals’ namesake Stavely project, some 250 km west of Melbourne.

“Despite the restrictions due to Covid-19, the whole of the minerals industry has managed to keep operating pretty well. However, many of its people will be relieved when they can again travel freely to catch up with family and friends.”

“Given the border constraints this year, there is now a real shortage of mining industry workers in Western Australia,” Close said.

“So there are plenty of job opportunities, whether it is in the trades, the professions or a wide range of support roles. For example, drilling contractors are flat out and having trouble getting staff such as drillers and particularly drillers’ off-siders. Remember also that the Super Pit is planning to recruit several hundred people as its production expands.”

Among the operations recording lower output in the September 2020 quarter were Newcrest Mining’s large Cadia East mine, down 40 000 oz; the Kalgoorlie operations of Northern Star Resources, excluding the Super Pit, down 29 000 oz; Newcrest Mining’s Telfer mine, down 27 000 oz; and St Barbara’s Gwalia operation down a similar amount owing to a rockfall in the Hoover decline.

Those operations with improved gold output included AngloGold’s Sunrise Dam mine, up 15 000 oz, Newmont Corp’s Boddington gold operation, up 10 000 oz and Kirkland Lake Gold’s Fosterville mine, up 6 400 oz.

Two small operations in New South Wales recently joined the list of producers. One is Auralia Metals’ Dargues Creek venture near Braidwood, south-east of Canberra, and the other is Manuka Resources’ Mt Boppy/Wontawinta operation, east of Cobar.