(Kitco News) - Not only is Australia’s gold market experiencing significantly elevated prices, but production also remains relatively stable, according to Melbourne-based gold mining consultants Surbiton Associates.
In its quarterly production report, the consultancy stated that Australia produced 73 tonnes of gold in the first three months of the year—down 7% from the fourth quarter of 2024 but up 4% compared to the same period last year.
“At today’s gold price, the March quarter’s output is worth over A$12 billion, so understandably many producers are optimizing their operations in response to such price increases,” said Dr. Sandra Close, a director of Surbiton Associates.
Close added that the relatively stable production is due to increased low-grade ore processing.
“Higher gold prices make lower cut-off grades economical because what was previously unprofitable to mine and treat becomes profitable,” Dr. Close explained. “If operations are able to lower their cut-off grades, then a greater amount of gold is recovered from each orebody.”
She also noted that higher prices allow Australian producers to reclaim low-grade material from stockpiles. She pointed out that this production optimism has grown significantly over the past five years.
“Surbiton Associates’ latest analysis shows that low-grade, reclaimed stockpiled material currently makes up as much as 15% of the total ore being treated,” said Dr. Close. “Thanks to increasing gold prices, the proportion of low-grade material being blended into feed has risen steadily over the last five quarters—from just around 1% a year ago.”
While Australia’s gold production has remained relatively muted despite higher prices, Close said that trend is expected to shift in the near future. She explained that elevated gold prices should encourage companies to restart past-producing mines. However, she also noted several hurdles to increased output.
“Many existing treatment plants are now running close to capacity, so there is a shortage of immediate processing availability for emerging small miners who want to sell parcels of ore or have their ore toll-treated,” she said.
Despite some production challenges, Close concluded that higher margins mean Australian gold producers are in good shape this year.
