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Record gold price against Aussie dollar impacts Q1 gold production - Surbiton Associates

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(Kitco News) - Australia saw a sharp drop in gold production in the first quarter due to record high prices against the Aussie dollar, according to the latest data from Melbourne gold mining consultants, Surbiton Associates.

In a report released at the start of the week, the firm said gold production fell by 12% to 77 metric tons of gold from 87 tons in the fourth quarter of 2019, the highest quarterly output.

“The reduction in output is no cause for alarm -- it is no great surprise that the March quarter 2020 gold production is down,” said Dr. Sandra Close, a director of Surbiton Associates. “I think record Australian dollar gold prices were a significant contributing factor.”

Close noted that mining companies are now processing lower-grade ore because of a record gold price against the Australian dollar, which is impacting production levels.

“We saw the same effect of prolonged higher prices reducing production when the Australian dollar gold price rose substantially over several years, to reach more than A$1,500 per ounce in 2011 and 2012,” Close said.

Surbiton Associates said that currency fluctuations has had a much bigger impact on gold production than the COVID-19 pandemic. The firm noted that most mines operate in remote locations, with some 70% of gold production coming from Western Australia.

“The gold mining industry and the mining industry, in general, have handled the problems associated with the coronavirus threat very well,” Close said. “Some operators have re-organized rosters and some fly in-fly out employees are working for extended tours of duty, in order to reduce the movement of personnel.”

Australia’s top five gold producers for the March quarter 2020 were:




Cadia East


Newcrest Mining Ltd



Kirkland Lake Gold Ltd



Newmont Goldcorp Corp



Northern Star Resources Ltd 50%, Saracen Mineral Holdings Ltd 50%



Newmont Goldcorp Corp

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