According to Surbiton, gold output for the period totalled 292 tonnes, or near 9.4 million ounces, for 2015/16, some five tonnes or two percent more than in the previous financial year. Production for the June 2016 quarter was 74 tonnes, about two tonnes or three percent greater than for the March 2016 quarter.

“The whole 2015/16 year’s gold output would be worth over A$16 billion at the current gold price of around A$1,730 per ounce,” said Dr Sandra Close, a Surbiton director. “Gold is one of our major exports, it alone accounts for some 5-6 percent of Australia’s total exports.”

One of the main reasons for the nation’s strong gold mine performance is because the Australian dollar remained weaker through much of 2015/16 while the US dollar gold price rose substantially in the second half. This led to a much higher Australian dollar gold price, which provided a welcome boost for local producers, whose costs are predominantly in Australian dollars.

“With better gold prices many producers are now taking the opportunity to increase output, increase revenue and strengthen their financial position,” Dr Close said. “Notably, in the June quarter, although the amount of ore treated was little changed, overall the grade of ore processed was higher.”

Operations recording higher gold production in the June quarter included Newmont Mining’s Tanami mine in the Northern Territory, up 38,000 ounces; the Super Pit at Kalgoorlie owned by Newmont and Barrick Gold, up 16,000 ounces; and Saracen’s recently refurbished Thunderbox mine near Leinster, WA, up 13,000 ounces.

On the other hand, Newcrest’s Cadia operation in NSW produced 25,000 ounces less gold in the June quarter.

“Clearly, whether they are large, small or new producers, many companies in the gold sector are keen to take advantage of the prevailing prices by using various strategies to maximise their gold output,” Dr Close said.

She said that several of the juniors were either selling their ore or having it toll treated. This included companies that are currently trucking ore, such as Empire Resources, Kin Mining, GME Resources, Royal Nickel and Kidman Resources.

“Recently Golden Mile Milling revamped the Lakewood mill in Kalgoorlie to provide a dedicated plant which is now available for toll treating smaller parcels of ore,” Dr Close said. “This is in addition to the long-operating Greenfields custom mill at Coolgardie, plus the various operations that are doing deals with the juniors too.”

Several companies are also looking to come into production in the near future by refurbishing old plants that are currently on care and maintenance.

“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 currently halfway through an upgrade to increase capacity and improve recovery.”

She said that hopefully the higher Australian dollar gold prices would be reflected locally in larger exploration budgets.

“Spending money on exploration for a mining company is like research and development spending for an industrial company,” Dr Close said. “It is absolutely essential for the long-term survival of the industry. Remember, with production nearing 300 tonnes a year, a similar amount of gold must be discovered annually for gold reserves and resources just to stand still.”

For the June quarter the Super Pit at Kalgoorlie was the largest producer with 194,000 ounces. It is owned equally by Newmont Mining and Barrick Gold but recently Barrick announced that its 50 percent holding was for sale. Newmont’s Boddington operation, with output of 192,000 ounces, produced marginally less gold than the Super Pit, while Newcrest’s Cadia East was the third largest with 176,610 ounces.

Australia’s largest gold producing mines in 2015/2016 were:

Source: Surbiton Associates

As can be seen from the above table, Australian gold production is dominated by three of the world’s largest gold mining companies – Newmont (No.2), Barrick (No. 1) and domestic gold mining giant Newcrest (No.6). AngloGold (No.4) is also a significant producer there.

The latest figures from Surbiton Associates suggest that Australia will comfortably retain its world No. 2 gold producer status, keeping it ahead of Russia, which had been closing the gap. Russian producers too had been benefiting from a declining domestic currency vis-à-vis the U.S. dollar – probably even more so than Australia, but it can be difficult there to expand mines, or build new ones due to the harsh climatic conditions..

Top 20 Gold Producing Nations (tonnes) – 2015