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Solid Australian Gold Production In Q1 Despite Weather Issues

Kitco News

(Kitco News) - According to the firm’s latest mining report, Australia produced 74 tonnes of gold in the first three months of the year, down 7% from 80 tonnes produced in the final quarter of 2017.

However, the firm noted that although production is up 4% compared to activity seen in the first quarter of 2017.

“Overall it was a reasonable performance given that production in the December quarter was particularly high at 80 tonnes,” said Dr Sandra Close, a Surbiton Associates’ director. “This was an outstanding result, however, as anticipated, the figures for the latest quarter are down, as the usual wet weather early in the year in Western Australia and north Queensland caused production cuts at several mines.

“When wet conditions cause mining and haulage problems, operators have to draw from low-grade stockpiles to maintain mill throughput,” she added.

Looking at some of the major operations, Close said that , AngloGold and Independence Group’s Tropicana Joint Venture produced 34,000 ounces less; Newcrest’s Telfer operations output was down 33,000 ounces; Newmont and Barrick’s Super Pit was 28,000 ounces lower; and output from Newmont’s Boddington and Tanami operations fell by a combined 30,000 ounces.

“Only a small number of operations reported higher output during the March quarter,” she said. “AngloGold’s Sunrise Dam operation increased output by about 20,000 ounces mainly due to higher recovered ore grade from underground, while both BHP’s Olympic Dam and Silver Lake’s Mt Monger operations each produced 13,000 ounces more.”

However, it’s not just weather-related difficulties that the Australian mining industry faces. Close said that there is government chatter about increasing royalties on gold production in Western Australia. While the current royalty plan was left unchanged in the state’s May 10 budget, Treasurer Ben Wyatt has been supportive of raising the fees.

“Overall the gold mining sector works hard to control costs, but currently some producers have All In Sustaining Costs (ASICs) well above the gold price,” Close said. “To impose a higher royalty would seem a peculiar way for the present WA government to keep people in work and to keep the gold industry productive and contributing to our export earnings.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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