Q3 Australian gold output hits 71 tns vs 69.5 tns last year

Otmane El Rhazi from The Bullion Desk.

Australian third-quarter gold production of 71 tonnes was down around two-thirds of a tonne on second-quarter output but up from the year-ago figure of around 69.5 tonnes, Surbiton Associates said

“It is not surprising that gold production remains steady, despite the lack of market support,” Sandra Close, director of the mining consultancy, said in a release on Monday. “There are several contributing factors, including operational parameters such as grade and throughput, the effect of exchange rate movements and the impact of hedging activities.”

Despite the drop in gold prices – it was last at $1,172 per ounce, down from a 2014 peak of $1,388.70 in March and a low of $1,131.60 in November – the Australian dollar gold price has been steadier thanks to lower Australian dollar exchange rate, particularly in the last few months.

The average gold price for the September quarter was A$1,385 per ounce.

“Results this September quarter clearly show the benefit of hedging,” Close said. “Several producers delivering some of their production into forward positions or using put options achieved well over A$100 per ounce more than the average spot price.”

Producers with lower third-quarter output include Newmont’s Tanami operation, down 23,000 ounces: Jundee, down 19,700 ounces; and St Barbara’s Gwalia mine, down 14,000 ounces.

At Jundee, the second quarter was the last under Newmont Mining’s ownership – production was maximised before the operation was sold to Northern Star Resources Ltd on July 1. At Gwalia, St Barbara said a two-week shutdown to replace ball mill foundations adversely affected production.

Production at Evolution Mining’s Mt Carlton mine was up 16,700 ounces due to switching from silver-rich ore to predominantly gold-rich ore. Output at AngloGold Ashanti’s Sunrise Dam operation rose 16,000 ounces due to much higher throughput.

Production at Regis Resources’ Rosemont mine rose 15,500 ounces due to a greater tonnage of ore treated, with higher grades and higher recoveries, as the mine overcomes the effects of flooding earlier in the year.

“The gold sector is maintaining production but low gold exploration expenditure is still a real concern,” Close said. “However, with reduced share prices and a shortage of new capital we are seeing some rationalisation of exploration tenements and projects among the junior companies. Hopefully this will provide some much-needed stimulation.”

(Editing by Mark Shaw)

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