Australian Gold Output Flat Despite Higher Prices

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This story features ST. BARBARA LIMITED.
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By Chris Shaw

While falling in recent sessions the gold price remains at elevated levels and according to a number of analysts is poised to move even higher, but maybe the key news for Australian producers is production levels have not risen in line with the price gains in the metal over the past year or so.

As mining consultants Surbiton Associates notes Australian gold production for the September quarter was 61.7 tonnes or two million ounces, an amount equal to the September quarter last year but about one tonne or 33,000 ounces below that of the June quarter.

This should still be enough to see Australia take third place in terms of global producers, Surbiton suggesting China may well finish the year as the largest producer, overtaking South Africa in the process.

Output may be steady but in price terms Australian producers are enjoying record levels with the per ounce price climbing to a high of $939 per ounce late last month. While this is a positive for earnings in the sector Surbiton notes it may in fact encourage producers to extend mine life by lowering cut-off grades rather than generating increased output.

This means exploration remains key, as Surbiton points out each year Australian producers mine about 250 tonnes or eight million ounces of gold and this amount must be found just to maintain reserves at current levels.

The next year or so should see a number of new or recycled project coming on stream, Surbiton noting Newmont-AngloGold’s Boddington mine will soon be producing, as will Avoca Resources’s ((AVO)) Higginsville mine, Oxiana’s ((OXR)) Prominent Hill operation and St Barbara’s ((SBM)) Gwalia project.

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