Australia mined around $26 billion worth of gold in the last financial year, in yet another bumper outcome for the local resources industry.
Output for the 2021/22 year totalled 317 tonnes – equivalent to two blue whales – led by the nation’s biggest gold miners Newmont and Newcrest Mining.
The annual result was boosted by a strong final quarter when 83 tonnes of gold was produced, up nine per cent from the March quarter, according to Melbourne-based gold mining consultants Surbiton Associates.
“The industry treated about five million tonnes more ore in the latest quarter than in the previous three-month period,” Surbiton director Dr Sandra Close said.
“Producers seem to have taken the opportunity to end the financial year on a high note, by pushing their treatment plants a little harder and treating higher grade ore.”
The outlook for 2022/23 also looks bright after two new projects, both in Western Australia, came online in the June quarter.
Red 5’s King of the Hills mine near Leonora produced 9,500 ounces of gold in the month of June alone, while Calidus Resources’ Warrawoona mine has produced 10,000 ounces since May.
When in full production the mines could add more than 10 tonnes of gold output a year, Surbiton said in a report released on Sunday.
However, worker shortages, COVID-19 infections and the rising input costs for things like fuel and chemicals, continue to cause headaches for the sector.
Beacon Minerals, which operates the Jaurdi/Lost Dog gold project southwest of Kalgoorlie, estimates its fuel cost has risen by 58 per cent, Dr Close noted.
This has happened alongside a 95 per cent spike in the cost of cyanide, a 56 per cent lift in the cost of explosives and a 43 per cent rise in the cost of grinding materials.
Nevertheless, Australian gold producers have been benefitting from a weaker Australian dollar against the US dollar, which is the base currency for gold.
“Local investors should always take note of the gold price in Australian dollars because producers’ costs are mostly in Australian dollars,” Dr Close said.
“In the second quarter of 2022, the US dollar price of gold fell by $US125 per ounce but the Australian dollar gold price actually rose by almost $42 an ounce due to a US six cent movement in the exchange rate.”
On the weekend, the price of gold was hovering around $US1710 per ounce.
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