Home' Australian Resources and Investment : September 2012 Contents VOLUME6NUMBER4•AustralianResourcesandInvestment•43
Gold production down, but new
operations in the pipeline
The most recent issue of the company's Australian
Gold Quarterly Review showed that this was the third
consecutive quarter in which gold production fell. The
lower output was due to a number of factors, including the
effects of wet weather.
'The March quarter often has lower gold production and
this year was no exception,' said Dr Sandra Close, a Director of
Surbiton Associates. 'As well as the usual ups and downs, wet
weather caused access problems in several mines, particularly
in New South Wales and the Northern Territory, so there was
greater reliance on treating lower-grade stockpiles, which
reduced gold output.'
Also, the March quarter is one day shorter than the
December quarter and Dr Close said that this alone accounts
for about two-thirds of a tonne of gold output.
'Several of Australia's largest operations, including
Boddington, Cadia Hill and the SuperPit, had lower output in
the March quarter,' Dr Close said. 'Although, on the positive
side, there are a number of new or redeveloped operations
coming on stream.'
At Newmont Mining's Boddington mine near Perth, gold
production fell by 43,000 ounces -- or well over a tonne of gold
-- due to lower grades being mined and also fewer tonnes of ore
Ground slippage problems and heavy rain affected gold
output at Newcrest Mining's Cadia Hill operation in New South
Wales, where production fell by 27,000 ounces compared with
the previous quarter.
The Super Pit at Kalgoorlie (a 50/50 Newmont Mining
and Barrick Gold operation) regained its place as the largest
Australian producer for the quarter, even though its output
was down 16,000 ounces due to mill maintenance, which
reduced the amount of ore processed.
'Some new or recycled operations have already commenced
production in 2012, such as Ramelius Resources at Mt Magnet,
while others will join the list of producers by the end of the
year,' Dr Close said. 'Among these are a number of copper-gold
producers including Osborne, DeGrussa and Kanmantoo.'
In Queensland, Ivanhoe Australia produced the rst
copper-gold concentrates from its re-opened Osborne mine,
near Cloncurry. Sand re Resources shipped the rst high-
grade copper ore from its new DeGrussa copper-gold mine in
Western Australia. Hillgrove Resources' Kanmantoo mine in
South Australia continued to ramp up production.
'In the near term, output from these new copper-gold
operations is offset by the closure of the open pit at Xstrata's
Ernest Henry operation in Queensland, which has been one of
Australia's largest gold by-product producers,' Dr Close said.
'However, Ernest Henry is currently being redeveloped as an
Dr Close said that by far the most signi cant new
operation is Newcrest Mining's Cadia East gold-copper mine,
near Orange, New South Wales, which is slated to come into
production around the end of this year.
'The Cadia East underground mine will replace the worked
out Cadia Hill open pit, and when it reaches full production in
around 2016, it will produce about 700,000 to 800,000 ounces
of gold and 100,000 tonnes of copper annually,' Dr Close said.
'It will be one of the largest underground mines in the world
and by far the largest in Australia.
'There is also a string of medium to small gold operations
that should begin production later this year,' Dr Close said.
'Each is not large, but taken together they amount to a steady
supply of new projects that replace those that are worked out
These include Regis Resources Ltd's Garden Well operation
in Western Australia, which should produce over 200,000
ounces of gold per year, and Millennium Minerals' Nullagine
plant, scheduled to produce about 100,000 ounces of gold
'There is still considerable focus on the gold price,' Dr
Close said. 'Despite its volatility in United States dollar terms
since the start of the year, it has been much less variable in
Australian dollar terms, due to exchange rate variations.'
The United States dollar gold price rose early in the year to
peak at near US$1800 per ounce in late February and has now
fallen to below US$1600 per ounce. By comparison, since the
start of the year, the Australian dollar price has uctuated in a
narrower range, averaging around A$1600 per ounce over the
period. Over the same period, the Australian dollar has varied
some 10¢ against the United States currency.
'Irrespective of the vagaries of the gold price and exchange
rate variations, uncertainty remains on world markets,' Dr
Close said. 'While the European nancial crisis is the current
concern, many of the other factors affecting global nancial,
economic and political uncertainty remain and these problems
are not going to be solved quickly.'
Australia's gold production was 62 tonnes in
the first three months of 2012: down five per
cent (three tonnes) on the previous quarter
and down four per cent on the March quarter
in 2011, according to Melbourne mining
consultants Surbiton Associates Pty Ltd.
Links Archive July 2012 December 2012 Navigation Previous Page Next Page