June’s upgrade at DeGrey’s Mining’s Mallina find and Rio Tinto’s huge Winu low grade discovery have confirmed that the ‘hot’ new gold hunting areas in Australia are the wide-open spaces of the Pilbara in northern Western Australia, better known for being home to the world’s biggest iron ore operations.
WA is still the most attractive region in Australia for explorers, a point underlined by the Federal Department of Resources in its June Resources and Energy quarterly.
We already know that WA dominates a lot of resources – LNG, oil, iron ore, of course, nickel, a bit of copper and lithium.
But while gold is a given and an old favourite, there are more signs of renewed interest, with the Pilbara region, the world’s iron ore hot spot, attracting more and more attention.
The Mallina find is close to the coast and 80 miles to the south of Newman, the iron ore capital of the Pilbara. Winu is much further east, near the existing Telfer mine of Newcrest.
They and a host of smaller projects and mines will add to the attractiveness of Pilbara with its iron ore, lithium and oil and gas.
Western Australia accounted for 67% (or 220 tonnes) of Australia’s gold mine output in 2020, according to the Federal Resources Department’s June quarter report on the outlook for minerals and commodities over the next two and a half years.
And while the traditional goldfields around Kalgoorlie and nearby regions continue to attract continuing attention (as Gold Road’s Gruyere mine testifies), the Pilbara is now ‘hot’ list for more and more explorers.
For years the Telfer mine of Newcrest (in fact its predecessor, BHP Gold) has been the major gold discovery in the Pilbara region, with smaller discoveries and mines in the area opening and closing.
“The discovery of conglomerate gold nuggets in the Pilbara region in 2017 has sparked a new gold rush in the area” according to the Resources Department’s June quarter outlook.
“Unlike traditional gold-bearing rocks that have led to the development of a number of mines in the Pilbara over the last 100 years, the latest discovery is in conglomerate sedimentary rock — material made up of rocks ranging in size from gravel to boulders (CSIRO).
“In February 2020, De Grey Mining made a large scale, high value, near surface gold discovery at an area called Hemi — 80km south of Port Hedland — in the Pilbara region.
The Hemi discovery is an intrusion – hosted form of gold mineralisation, which has not been seen before in the Pilbara region. A major drilling program is underway with the aim of delivering an initial resource estimate in 2021, the quarterly explained (which in turn helps explain why there is so much market chatter about it among professionals, but many investors haven’t yet cottoned on to the importance of the find)
“The Paterson Province in the Pilbara region is now one of the world’s most sought-after exploration areas, with Rio Tinto’s recent discovery of the Winu copper and gold deposit in 2018, and Greatland Gold’s discovery of the Havieron gold-copper deposit in 2018.
“Greatland Gold has teamed up with Newcrest Mining in a farm-in joint venture to develop the Havieron project and explore further. The Havieron project is rapidly developing, with an underground decline opened on 13 May 2021.
Calidus Resources’ 4.3 tonnes a year Warrawoona gold project in the east Pilbara is expected to start commercial operation in early next year and Novo Resources’ 3.1 tonnes a year Beatons Creek gold mine in the Pilbara poured its first gold on February 16 this year.
Artemis Resources’ Paterson Central and Carlow Castle gold and copper projects in the eastern and western Pilbara are in an advance stage of exploration. Copper and gold were first discovered in the Carlow Castle mine in 1874, the quarterly pointed out.
And Capricorn Metals has started continuous ore processing at its 2.1 tonne Karlawinda gold project in the Pilbara, near the iron ore hub of Newman with gold pouring due in the week starting July 24, the company says.
In the March quarter 2021, Australia’s gold exploration spend was $359 million, down $25 million (or 6.4%) from the December quarter 2020.
However, the Australian gold industry spent more on exploration programs in the March quarter 2021 than the March quarter 2020 (which was Covid impacted.
Exploration expenditure was up by nearly 32% (or $87 million) year-on-year, driven by high US dollar gold prices.
According to the June outlook, gold exploration expenditure accounts for 49% of Australia’s total minerals exploration expenditure ($735 million). Western Australia remained the focus of gold exploration activity in Australia, accounting for 69% (or $247 million) of total gold exploration expenditure.
Looking at wider forecasts, the quarterly forecasts that Australia’s gold export earnings for 2020–21 have been revised down to $28 billion — a fall of 3.1% (or $910 million) — from the March 2021, “reflecting a larger than expected fall in export volumes to the UK, US and Switzerland in the March quarter 2021.”
The forecasts for Australian gold exports in 2021–22 and 2022–23 have been revised up by 7.0% (or $1.9 billion) and 6.5% (or $1.7 billion)- for a total of $3.6 billion over the next two financial years.
The upgrades reflect an expected rise in exports to China and India.
The quarterly reveals that Australian gold export volumes for 2020–21 has been revised down by 6.1% (or 21 tonnes) from the March 2021 due to a larger than expected fall in imported ore for processing at Perth Mint from Papua New Guinea, and from Perth Mint re-exported to the world.
Australia’s gold mine production for 2020–21 has been revised down to 332 tonnes (down by 25 tonnes or 7.0%) from the March 2021 Quarterly, “reflecting unplanned maintenance, lower ore grades, unexpected flooding and labour and skills shortage at some gold mines.
The forecasts for Australian gold mine production in 2021–22 and 2022– 23 have been revised down by 2.3% (or 9 tonnes) and 1.5% (6 tonnes), respectively, from the March quarterly, due to the downward revision in 2020–21.
This month June quarterly reports from miners like De Grey, Capricorn, Rio Tinto, Artemis, Newcrest and others, should be examined by investors wanting more info on the Pilbara.
