Gold output at 15-year high

Producers are maximising output to capture $700-plus an ounce margins, as the yellow metal’s price soars.

Surbiton director Sandra Close called on the industry to turn more of its bumper returns to exploration. Picture: The Australian /Renee Nowytarger.

Australia’s gold production has surged to a 15-year high in response to bumper gold prices prompting producers to maximise output to capture $700-plus an ounce margins.

A production survey by industry consultant Surbiton Associates found gold output in the June year totalled 292 tonnes (9.38 million ounces), worth $16.2 billion at spot prices.

That was 2 per cent more than in the previous financial year, with production in the final June quarter at 74 tonnes.

Surbiton director Sandra Close called on the industry to turn more of its bumper returns to exploration.

“Spending money on exploration for a mining company is like research and development spending for an industrial company,” Dr Close said.

“It is essential for the long-term survival of the industry.”

She said producers had responded to the higher local gold price ($1745 an ounce yesterday) by increasing output.

“Clearly ... many companies are keen to take advantage of the prevailing prices by using various strategies to maximise their gold output,” Dr Close said.

It has been a feature of the rise in the gold price that it has given owners of “stranded’’ gold deposits the chance to sell their ore to treatment plant owners or to have it toll treated.

Dr Close said several companies were also looking to come into production in the near future by refurbishing old plants.

“Some producers are undertaking debottlenecking programs in order to increase the throughput capacity in their treatment plants,” Dr Close said. “For example, at Tropicana, the AngloGold/Independence Group joint venture is halfway through an upgrade to increase capacity and improve recovery.”