ASIA MINERGOLD - Australian output is stable Gold output in...

ASIA MINER

GOLD - Australian output is stable
Gold output in Australia remains relatively stable with 2 million ounces produced in the three months to September 30, 2007, according to Melbourne mining consultants Surbiton Associates.

Surbiton"s latest report on the Australian gold mining industry says that output for the period was about 33,000 ounces less than in the June quarter 2007 and was the same as in the September quarter 2006. Quarterly production has remained relatively stable for two years
Surbiton director Dr Sandra Close says: "The Australian gold price reached an all time closing high of Aus$939 per ounce on November 26 and was even higher during the day. This occurred due to a combination of a higher US dollar gold price and a lower Australian dollar exchange rate."

She says the higher prices are obviously encouraging but even if they are sustained, they may have little effect on production levels as producers could well prefer to extend the life of mines by mining slightly lower grade ore.

"In the longer term, there is no substitute for exploration. Each year around 250 tonnes or 8 million ounces, worth more than Aus$7 billion, are mined in Australia and an equivalent amount of gold must be discovered annually just to maintain reserves.

"In the September quarter Telfer claimed the spot as top producer, with Super Pit and Sunrise Dam close behind. Together, these three operations accounted for almost a quarter of all the gold produced."

Operations which joined the list of producers include Meekatharra (Mercator Gold), Davyhurst (Monarch Gold) and Bronzewing (View Resources), while Wattle Dam (Ramelius Resources) and Laverton (Crescent Gold) are ramping up production.

"Australian gold output should benefit from a number of new and recycled projects coming into production in 2008 and 2009," Dr Close says. "These include Boddington (Newmont/ AngloGold), Gwalia (St Barbara), Higginsville (Avoca) and Prominent Hill (Oxiana) plus the continued build up from those operations that have recently commenced production."

She says it will be interesting to see how the world's largest gold producing countries rank. "It looks like China could overtake South Africa to become the world's number one producer for 2007. Australia will probably take third, followed by the United States."

www.surbiton.com.au