PRECIOUS METALS

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.

Image: iStock/alfexe

Image: iStock/alfexe

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.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.