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Oz Gold Output Heading For Record 2018

Australia’s gold output is heading for an all time high with up to another 30 tonnes of metal set to start being produced by new and existing mines.

Research by mining consultants Surbiton Associates found Australia produced 301 tonnes (or 9.67 million ounces -Moz) of gold in 2017, up 3 tonnes (96,452oz) on 2016’s level.

That saw Australia remain the world’s second biggest gold producer behind China, which produced an estimated 430 tonnes (13.8Moz) last year.

That was the highest output since 1999, and was a pretty good effort seeing more than 250,000 ounces was lost from the closure of the Cadia East mine in NSW owned by Newcrest after it was damaged by an earthquake in April 2017.

According to the World Gold Council, China’s output fell 9% last year.

Surbiton Associates’ director Sandra Close said 2017’s production was worth almost $A16 billion based on the average gold price over the year.

“Australian gold production is still trending upwards and the next few years look promising,” she said.

She reckons Australia could this year break its all-time gold 1997 production record of 314 tonnes (10.1Moz), because of a large number of new mines coming on stream and few closures.

She said it would not be surprising to see another 20 tonnes (643,014oz) of production added to Australia’s annual output this year.

Sizeable projects expected to come online this year include Dacian Gold’s Mt Morgans project near Laverton in WA with 150,000 ounces of year, Gascoyne Minerals’ Dalgaranga project near Mt Magnet also in WA and also with 150,000ozpa) and Kin Mining’s Leonora project, again in WA (55,000ozpa).

Westgold Resources is due to start up Tuckabianna treatment plant, near Meekatharra, into production, which could add another 100,000ozpa by 2020.

“Further out, development of the Gold Fields and Gold Road Resources’ Gruyere joint venture project in WA is one-third complete, with the start of mining scheduled for late this year,” Dr Close said.

“The operation will commence in early 2019 at a rate of about 270,000 ozpa when in full production.”

And there’s the normal ramp of output from existing mines with Newcrest’s Cadia East operation in NSW returning to capacity after being out since April after the Good Friday ground quake damaged some of the mining areas.

Cadia produced more than 168,000 ounces in the March quarter of 2017, but this fell to 76,000 ounces in the next quarter in the wake of the quake. Production restarted on an incremental basis late last year and early in 2018. At its peak it can produce well over 650,000 ounces a year.

And North Star Resources is looking to boost production to 600,000 ounces by the end of 2018, up around 15%. production is currently running at an annual rate of just over 530,000 ounces.

The only closure of note was Doray Minerals’ Andy Well mine, which began production in 2013 and was placed on care and maintenance earlier than expected last November after producing about 40,000oz in 2017.

View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



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