SOARING gold prices above $1,400 per ounce have ensured a steady stream of gold mine developments across Western Australia.
SOARING gold prices above $1,400 per ounce have ensured a steady stream of gold mine developments across Western Australia.
Not surprisingly, Australian gold output surged 10 per cent to almost 7.9 million ounces last financial year, and the Australian Bureau of Agricultural and Resource Economics is now tipping output this year to exceed 9.3 million ounces worth almost $17 billion.
With WA producers accounting for around two thirds of national production, new projects in this state will be critical to meeting that lofty target.
Though the value of gold projects under construction has fallen dramatically since the completion of Newmont’s $3 billion Boddington gold mine early last year, it does not tell the full story for the industry.
For while there is a dearth of world-class gold developments, a steady stream of junior miners has been queuing up to bring more modest mines into production on the back of prices now almost three times their average in 2005.
In terms of major developments, the only large-scale project on the horizon is the Tropicana gold mine, 200 kilometres east of Laverton, which partners AngloGold Ashanti and Independence Group expect to approve in December.
Easily Australia’s biggest gold discovery in a decade, the remote project has total resources of over five million ounces. The partners estimate the project will cost around $700 million to develop, including the mining fleet, and that it could yield up to 410,000 ounces a year from 2013.
But while first gold from Tropicana is still several years away, a string of other smaller gold projects are under construction.
Top of the list is Regis Resources, which expects to commission its $75 million Duketon gold mine north of Laverton later this month and produce almost 90,000oz a year.
Now chaired by WA gold veteran Nick Giorgietta, Regis began construction of the mine late last year after overhauling the development plan to cut $50 million from the total cost.
Integra Mining is following not far behind Regis, and is counting down to produce first gold from its $64 million Randalls gold mine near Kambalda later this month.
Output from Randalls was originally expected to average 75,000oz when major construction was completed in February, but Integra now expects to produce at least 90,000oz/year following a string of high-grade discoveries recently.
A further upgrade of the plant is also being evaluated, which could boost output even further to 140,000oz/year.
St Barbara, which developed the $100 million Gwalia Deeps mine at Leonora two years ago, is mid-way through development of a second Leonora operation at its King of the Hills project. The $14 million underground development at the closed Tarmoola mine is due to start production in the middle of next year, at a rate of 65,000oz/year.
In addition to those projects already under construction, a string of other mines have come on stream since the start of the year to boost WA gold output.
The most recent to start production was Catalpa Resources’ $92 million Edna May mine at Westonia, which poured first gold in May and is on track to produce 100,000oz this financial year.
April was also a big month for new mines, with Saracen Minerals pouring first gold from its $27 million Carosue Dam mine near Laverton. The mine is forecast to produce around 120,000oz/year, but cost relatively little to develop because of the modest investment needed to restart the plant which was closed by its previous owner in 2005.
At the same time Saracen was commissioning Carosue Dam, Canadian producer La Mancha Resources also began production at its White Foil satellite mine near its existing Frogs Legs operation, boosting its annual WA output by over 15,000oz.
A1 Minerals was among the first new producers this year, pouring first gold in March at its $10 million Brighstar gold mine near Laverton, which is expected to produce at least 30,000oz/year for the next four years.
Moving up the production scale, Navigator Resources started production at the big Bronzewing gold mine near Wiluna in April, two years after it was suspended when previous owner View Resources collapsed.
