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Australian Gold Production Hits 20-Year High - Surbiton Associates

Australia’s gold production hit its highest level in two decades, according to mining consultants Surbiton Associates.

According to the firm’s data, gold production for the June quarter totaled 81 tonnes, an increase of 9% or 6.5 tonnes from the March quarter and up 8% from the same period in 2017.

For the financial year, the country’s gold production totaled 310 tonnes, its highest level since 1998.

“The 2017-18 output is 12 tonnes higher than for 2016-17 and only eight tonnes short of the record in 1997-98, while the latest quarterly figure is just 1.5 tonnes lower than the all-time quarterly record,” said Sandra Close, a director of Surbiton Associates, in a press release.

While Australia sees historical gold production, the firm warned investors that this pace might not last as there are a few issues the sector faces. She noted that Newmont Mining and Barrick Gold’s joint-venture project, the Super Pit, saw part of its northeast wall fail in mid-May, severely curtailing mining operations and ore haulage from the mining areas near the base of the pit.

“Just counting the reduced number of haul trucks coming out of the pit indicates that production will be affected,” Close said. “Given the nature of the slip and the pit configuration, it appears that this will be the case for some time.”

The mining sector in Western Australia also continues to face the threat of rising royalty fees, which Close said could impact companies’ exploration budgets, which is critical for the nation to remain a global player in the gold market.

Close said that it was vital that gold-mining companies maintained their spending on exploration and kept up the discovery of new deposits, in order to replace the more than 300 tonnes of gold now produced each year.

“Although production has risen, the Western Australian government must tread very carefully regarding any possible increase in the royalty on gold,” Close said. “Increased royalties must be paid for somehow and any extra impost could result in exploration budgets being cut and exploration activity reduced.”