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Old mines help lift gold output
Email Print Normal font Large font September 3, 2007

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AdvertisementTHE 10-year slide in the nation's gold production could be over, thanks to multi-year advances in gold prices prompting a recycling of gold projects.

The Melbourne industry consultant Surbiton Associates says gold production peaked at 318 tonnes in 1997-98 but fell to 249 tonnes in 2005-06.

The output for 2006-07 improved slightly to 251 tonnes, worth $6.6 billion at current gold prices. Surbiton's production survey of the industry, released yesterday, showed an encouraging 4.5 per cent increase in the three months to June 30, over the previous period, to 63 tonnes.

Surbiton's managing director, Sandra Close, said that Australian gold production may continue to improve.

"There are a number of recycled operations which are now coming back into production and building up to full capacity," Dr Close said.

The rise of recycled operations comes against a backdrop of a steady rise in gold prices since the July 1999 low of $US252.80 a troy ounce. Gold closed in New York on Friday at $US673.40 an ounce - a 166 per cent increase on the July 1999 low.

Dr Close said that the June quarter production was notable for the overall increase in the grade of gold ore treated and some operations reporting considerably higher output.

"Conditions were more favourable in the June quarter compared with the March quarter, when gold production was adversely affected by cyclonic weather in Western Australia," she said.

"This had a negative impact on mining operations and forced some mines to treat lower grade stockpiled ore," Dr Close said.

The June quarter also benefited from output at the first of a growing list of recycled projects.

These included the Union Reefs gold project in the Northern Territory, owned by Canada's GBS Gold, and View Resources' Bronzewing operation in Western Australia.

Monarch Gold's Davyhurst mine poured its first gold in August and Mercator Gold plc has just restarted the Bluebird mine near Meekatharra.

According to Dr Close, output from those operations should offset the loss in production from mine closures, the biggest of which is LionOre's Thunderbox operation in WA, which produced 160,000 ounces in 2006-07.

Barry FitzGerald