New mines set to bolster gold production

A combination of new mine developments and the recycling of old operationfeldspar flotation machinerys is tipped to end the recent trend of falling gold production in Australia.

According to a survey of output by Melbourne mining consultant Surbiton Associates, gold production in the March quarter was 62 tonnes, worth $US3.13 billion at the current spot price.

Output was down 3 tonnes or 5 per cent on the previous quarter and 4 per cent lower than the previous corresponding period. Output has now fallen for three consecutive quarters.

Surbiton director Sandra Close said gold production was often lower in the March quarter and this year was no exception.

"As well as the usual ups and downs, wet weather caused access problems in several mines, particularly in NSW and the NT, so there was greater reliance on treating lower-grade stockpiles, which reduced gold output," Dr Close said.

She said several of the biggest mines -- Newmont's Boddington mine in WA, Newcrest's Cadia Hill in NSW and Newmont-Barrick's Super Pit joint venture in WA -- had lower output in the March quarter. Cadia Hill's March quarter fell by 27,000 ounces due to slippage problems and heavy rain, while at the Super Pit in Kalgoorlie, output fell by 16,000 ounces due to mill maintenance.

But the Super Pit regained the title as Australia's biggest gold producer in the March quarter, with output of 182,000 ounces, displacing Boddington with its slip to 162,000 ounces.

Dr Close said, on the positive side, a number of new or redeveloped operations would contribute to overall production. "Some new or recycled operations have already commenced production in 2012, such as Ramelius Resources at Mt Magnet, while others will join the list of producers by the end of the year. Among these are a number of copper-gold producers, including Osborne, DeGrussa and Kanmantoo," Dr Close said.

The biggest of the new operations is Newcrest's Cadia East gold-copper mine, near Orange.

"The Cadia East underground mine will replace the worked-out Cadia Hill open pit and when it reaches full production around 2016, it will produce about 700,000 to 800,000 ounces of gold and 100,000 tonnes of copper annually," Dr Close said.

The survey comes as goldmining equities suffer from a retreat in the gold price from about $US1800 an ounce to $US1562 on Friday.