Mar 26, 2020

Latest Aurum report shows solid returns for miners

Latest Aurum report shows solid returns for miners

by Ross Louthean

Queensland’s Ernest Henry mine again produced the lowest all-in sustaining costs (AISC) for an Australian or New Zealand gold mine.

Aurum Capital’s December quarter report on Australian and NZ gold mines showed there had generally been an 0.2 per cent increase for AISC, lifting to an average $A1335 per ounce.

Put in late March terms, this would represent a significant return for gold miners on an unhedged gold price of $US1620/oz, translating to $A2,687/oz.

Ernest Henry retained its amazing AISC status in the December quarter with a minus $A526/oz, based on underground mining of 0.63 grams/tonne gold with a major copper content offset.

The Cloncurry district copper-gold operation is owned and operated by Glencore, with Evolution Mining holding a significant economic interest.

Second ranked on the Aurum list was Newcrest Mining’s Cadia Valley underground operation in New South Wales with an AISC of $A208/oz for a grade of 1.19 g/t, also with some copper content. Third was Kirkland Lake Gold’s Fosterville underground mine in Victoria with an AISC of $A378/oz but treating high grade of averaging 39.3 g/t.

New Zealand has two major gold mines, both operated by OceanaGold Corporation and while the Macraes mine on the South Island was a massive low-grade operation Waihi on the North mined epithermal gold, now only by underground method and it had 13th rank on the AISC list with $A1084/oz with a grade of 5.82 g/t and higher silver content. Macraes, with its fine-turned operating costs was ranked 31 with an AISC of $A1521/oz and treating ore grading 1.18 g/t.

Three of the other four Queensland mines in the top 44 AISC operations were three Evolution mines – Cracow underground (ranked 20) with $A1,284/oz; Mt Rawdon open cut (39) $A1815/oz and Mt Carlton open cut (43) with an AISC of $A2182/oz after mining changes that saw it drop 19 places on the previous quarter.

The other Queensland mine was Resolute Mining’s Ravenswood underground operation in 33rd place with $A1589/oz.

Australasia’s biggest gold producers in the December quarter were Cadia Valley with 2,39,722 oz, then Newmont Mining’s Boddington in Western Australia with 196,000 oz and then Kirkland’s Fosterville with 191,894 oz.

Aurum Analytics, which is supported by PCF Capital Group, said the average head-grade for open pit mines was 3.69 g/t and for underground it was 5.95 g/t gold.