The Australian gold mining industry has seen a near record high in gold production in the year to June, despite the lingering impact of two earthquakes on output at the country’s biggest mine.
In fact gold production hit a near 20 year high according to a report from Melbourne-based Surbiton Associates who produce regular quarterly and yearly reports on the sector.
Surbiton Associates’s latest report showed the nation’s gold miners produced 310 tonnes of gold (or just under 10 million ounces) in the 2017-18 financial year, the highest output for a June 30 year since 1998.
The three months to June saw gold production reach 81 tonnes up 9%, or 6.5 tonnes from the three months to March, and 8%, or 6 tonnes final quarter of 2016-17.
Surbiton Associates director Sandra Close said Australian gold production was near record highs.
“The 2017-18 output is 12 tonnes higher than for 2016-17 and only eight tonnes short of the all- time record in 1997-98, while the latest quarterly figure is just 1.5 tonnes lower than the all-time quarterly record,” she said in a statement last week.
.
“Boddington and (the Kalgoorlie) Super Pit vied for the top spot for the year, with each producing almost 23 tonnes, or nearly three quarters of a million ounces of gold.”
The Cadia mine was forced to trim production in 2016-17 and again in 2017-18 for a while as Newcrest battled to overcome the impact of two earthquakes on operations.
But in the end the mine produced 599,717 ounces of gold in the year to June, down from 619,606 in 2016-17, and well down on the original guidance of 680,000 to 690,000 ounces.
Newcrest guidance for Cadia for 2018-19 has been set at a high 800,000 to 880,000 ounces
If Cadia hits its guidance for the year of 800,000 to 880,000 it could claim the top spot.
Dr Close said many treatment plants were producing at full or even above capacity and a considerable number of smaller operations were having their ore toll treated or were selling it direct to existing mills.
However, she warned gold production could fall in the next few quarters.
The recent pit wall collapse at the Super Pit (in May) has curtailed mining operations and ore haulage from the mining areas near the base of the pit.
Despite this output at the Super Pit had actually increased by 22,000oz to 192,000oz during the quarter, but this was due to the company processing stockpiled ore, as Newcrest did with the two Cadia problems in 2017 and 2018.
“Super Pit’s increased production for the June quarter must have come from stockpiled material and perhaps from a reduction of gold in the processing circuit,” Ms Close said.“But I doubt that this can continue.”
Interestingly Bellevue Gold yesterday revealed that work it had done at the old WA mine (it closed in 1997) had confirmed a 500,000 ounce resource with a further estimate by the end of the 4th quarter of this year (https://www.asx.com.au/asxpdf/20180904/pdf/43y112gqlh442t.pdf).
“The Bellevue Gold Project is one of the highest grade new gold discoveries in recent times in Australia,” the company claimed on Tuesday in the latest of a number of bullish statements about his discovery of a new deposit at one of the older mines in WA.
The statement yesterday was an update on an announcement made a month ago providing a first estimate for the new deposit.
The Perth-based company, formerly known as Draig Resources before a name change in late July reported an independently inferred resource of 1.9 million tonnes of ore grading at 8.2 grams a tonne of gold for 500,000 ounces.
The estimate used a 3.5g/t gold cut off. Bellevue said a very high-grade component of 1.4 million tonnes at 9.6g/t gold for 430,000oz was reported at a 5g/t cut off grade.
Bellevue Gold shares rose more than 2% to 19.5 cents yesterday.
In her statement Ms Close said that recent studies predicting a fall in Australian gold output in coming years was wrong. Ratings group, S&P has claimed there is a danger Australian gold production could fall by around a third or 100 tonnes by 2022.
She said this forecast was “unduly pessimistic” and didn’t take account of the different shape of the Australian industry which depended on more small to medium deposits and mines that those in the US or South Africa.
“Many analysts, particularly in South Africa and the US, fail to understand that Australia is a land of small-to-medium-sized gold deposits. Large gold deposits such as those in the Rand or Nevada are not typical here,” Close said.
She added that it was vital that gold mining companies maintained their spending on exploration and kept up the discovery of new deposits, to renew the more than 300 tonnes of gold now produced each year.
