Soft quarter for Australian gold sector

AUSTRALIAN gold production dropped by 6% in the March quarter to 76 tonnes, according to Melbourne-based precious metal consultancy Surbiton Associates.
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The Omicron variant of COVID-19 impacted operations across the country, while some mines in Queensland and New South Wales were also impacted by wet weather.

"The disruption to production was not uniform," said Dr Sandra Close, a director of Surbiton and author of soon-to-be-released book Australia's Greatest Gold Boom.

"Some operations were hit really hard while others were barely affected, both in regard to COVID-19 and also to bad weather, which is often a problem in the March quarter."

Australia's biggest gold operation for the quarter was Newmont Corporation's Boddington in WA, which produced 182,000 ounces of gold, which was down 12,000oz quarter-on-quarter.

Newcrest Mining's Cadia in NSW was second with 149,568oz produced, up 34,000oz.

Fosterville in Victoria, now owned by Agnico Eagle Mines, was third with production of 126,707oz, up 18,600oz.

Northern Star Resources' KCGM in Kalgoorlie was the fourth-largest operation with 120,538oz poured.

Newmont's Tanami in the Northern Territory was fifth, producing 100,000oz, down 45,000oz.

"Reduced output was not surprising given the circumstances," Close said.

"Additionally, there were the usual crop of mining, haulage and mechanical problems that the sector has to contend with every quarter."

Late last month, Argonaut analyst John Macdonald noted that gold output was down but so was total spending.

"Productivity is more the problem than cost pressure," he noted.

"Everyone is guiding higher for the June 2022 quarter, except for the higher margin operators that can afford not to.

"Wishful thinking or a sign that the will to make the numbers can overcome entrenched productivity constraints."

Close noted that Calidus Resources' new Warrawoona operation in WA had just poured gold and would contribute to June quarter numbers, while Red 5's King of the Hills project in WA was close to first gold.