The Australian Gold Quarterly reported gold production in the country dropped 4% during the March quarter, compared to a year ago, due to a number of factors.
Australian gold production fell for the third consecutive quarter with 62 tonnes reported for the first quarter of this year, a 5% drop from the fourth-quarter 2011.
In the most recent issue of Surbiton Associates' Australian Gold Quarterly, Managing Director Dr. Sandra Close said, "As well as the usual ups and downs, wet weather caused access problems at several mines, particularly in the NSW and the NT, so there was greater reliance on treating lower grade stockpiles which reduced gold output."
"Several of Australia's largest operations, including Boddington, Cadia Hill and the Super Pit had lower output in the March quarter," Close said.
At Newmont's Boddington mine, gold production fell by 43,000 ounces (or more than a tonne of gold), due to lower grades being mines and fewer tonnes of ore processed.
Meanwhile ground slippage problems and heavy rain affected gold output at Newcrest Mining's Cadia Hill operation in New South Wales, where production fell by 27,000 ounces.
Although production at Newmont and Barrick's Super Pit at Kalgoorlie was down 16,000 ounces during the first quarter due to mill maintenance, Close noted the operation regained its spot as the top Australian gold producer during the quarter.
The top five gold producers for the March 2012 quarter were: Newmont Mining/Barrick Gold's Super Pit JV, 182,000 ounces; Newmont's Boddington Mine at 162,000 ounces; Newcrest Mining's Telfer Mine at 135,684 ounces; Gold Fields' St. Ives Mine at 120,340 ounces; and Newmont's Jundee Mine at 91,000 ounces.
"The March quarter often has lower gold production and this year was no exception," Close observed. The March quarter is also one day shorter than the December quarter, which she said alone accounts for about two-thirds of a tonne of gold output.
In her analysis, Close noted a number of copper-gold producers have already commenced or will go into production this year.
In Queensland, Ivanhoe Australia produced the first copper-gold concentrates from its re-opened Osborne mine, near Cloncurrey. Sandfire Resources shipping the first high-grade copper ore from its new DeGrussa copper-gold mine in Western Australia. Commissioned last year, Hillgrove Resources' Kanmantoo mine in South Australia continues to ramp up production.
Close said that by far the most significant new operation is Newcrest Mining's Cadia East gold-copper mine, near Orange, New South Wales, which is scheduled to come into production at the end of this year.
"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," Close noted. "It will be one of the largest underground mines in the world and by far the largest in Australia.
"There is also a string of medium to small gold operations which should begin production later this year," she added. They include Regis Resources' Garden Well operation in WA, which should yield more than 200,000 ounces of gold annually and Millennium minerals' Nullagine plant, scheduled to produce about 100,000 gold ounces annually.
In her analysis, Close advised, "There is still considerable focus on the gold price. Despite its volatility in US dollar terms since the start of the year, it has been much less variable in Australian dollar terms, due to exchange rate variations."
The U.S. gold price peaked near US$1,800 per ounce in late February and now has dropped to below US$1,600 per ounce. By comparison, the Australian dollar has fluctuated in a narrower range, averaging around A$1,600/oz since the start of this year. During the same period the Australian dollar has varied some 10 cents against the U.S. currency.
"Irrespective of the vagaries of the gold price and exchange rate variations, uncertainty remains on world markets," Close observed. "While the European financial crisis is the current concern, many of the other factors affecting global financial, economic and political uncertainty remain and these problems are not going to be solved quickly."
To obtain a copy of the most recent issue of the Australian Gold Quarterly Review, go to www.subiton.com.au