PERTH (miningweekly.com) – Australia's gold output increased by some 6% during the three months to June, compared with the previous quarter, with the country producing some 67 t, mining consultancy Surbiton Associates reported.

The June quarterly production was also 5% higher than the previous corresponding period.

For the financial year ended June, Australian gold production reached 259 t, or 8.3-million ounces, which was just marginally less than the ounces produced in the previous financial year.

“The higher gold output in the June quarter was due to higher tonnages of ore treated plus slightly higher ore grades,” said Surbiton director Dr Sandra Close.

“The increase in grade was precisely what we expected would happen following the price fall in early April.

“One of the easiest ways to cut cash costs per ounce is to increase the grade of ore going into the treatment plant. That’s what has happened, along with a range of other cost cutting measures, including increased throughput. However, some of the highest-cost producers have fallen by the wayside.”

She said that among those operations that increased output significantly in the June quarter were Evolution’s Mount Rawdon mine, in Queensland, which almost doubled gold production and St Barbara’s Gwalia operation, in Western Australia, with output up around 60%.

Newcrest Mining’s Australian operations also performed well, with output at Telfer, in Western Australia, up 30% while the Cadia operations, in New South Wales, delivered a 20% increase for the combined output of its three individual mines.

During the quarter four operations closed, with another two subsequently being put on care and maintenance, but several of these were small.

“Focus Minerals at Laverton, KGL Resources at Murchison, Navigator Resources at Bronzewing and Tanami Gold at Coyote all closed during the June quarter,” Close said.

“Subsequently, Apex Minerals at Wiluna has gone onto care and maintenance and Focus Minerals at Coolgardie is winding down.”

Looking ahead, Close noted that the September quarter would see first production from Doray Minerals’ Andy Well project near Meekatharra, as well as the long-awaited commissioning of AngloGold/Independence’s A$750-million Tropicana project.

“Also, Newcrest’s Cadia East mine continues to ramp up production, so together these will more than replace output lost from recent closures.”

She added that the share prices of many Australian gold miners were marked down heavily when gold prices fell sharply in April and again late June. However, with the Australian dollar losing about 15c since April, the fall in the gold price in Australian dollar terms was less marked than in US currency terms.

While the US dollar gold price was the benchmark internationally, the Australian dollar gold price was important for the local market as the majority of costs were also in Australian dollars, with exchange rate movements often dampening the effect of price changes for local producers, she said.

“The Australian dollar gold price averaged A$1 570/oz in the March quarter 2013, but fell to average A$1 425/oz for the June quarter,” Close said.

“But now the price has recovered to around the A$1 570/oz mark again. If you factor in higher grades plus other cost savings measures that the industry has recently implemented, profit margins should improve.”

She said that Australia was the world’s second-largest gold-producing country after China and that, despite fluctuations from year-to-year, Australian gold production had been fairly stable for the last decade, with average yearly production of around 250 t.

“Gold remains one of Australia’s single largest exports. At today’s spot price the 2012/13 year’s gold production is worth around A$13-billlion.”