Gold production continues to grow

Saracen Mineral Holdings has announced development of the Thunderbox mine is ahead of schedule, while Kidman Resources achieved its first gold pour at the Burbanks mine.

For Saracen, it means the $65 million project will begin production in the June quarter next year, after it had previously forecast September production.

The project is 7 per cent ahead of its budgeted delivery time.

Saracen expects it will double its total output within two years.

That increase is funded from cash flows internally, with the company holding about $45 million in net cash reserves and no debt.

Meanwhile, Kidman Resources has successfully poured first gold at its Burbanks mine near Coolgardie.

Managing director Martin Donohue said cash flow from production would underpin underground development including a diamond drilling program.

“Since acquiring the project only four months ago, Kidman has completed successful surface drilling programs and now started an extensive new underground drilling program,” he said.

“We have also delivered an initial resource (in August), which we expect to upgrade on the back of recent drilling, upgraded the underground development and infrastructure, commenced mining underground and the open pit and now poured our first gold.”

The news shows that there is still activity in the resources sector, although it is driven by gold miners rather than iron ore.

Part of that improvement is due to the depreciating exchange rate, which has made Western Australia gold more competitive in US dollar terms.

Business News reported earlier this year that a series new gold mines in WA would increase production by around 1 million ounces annually.

Kidman Resources was down marginally to 9 cents per share, while Saracen was up 2 per cent to 44 cents per share.