Australia to overtake China as world’s largest gold producer: Resources Monitor

The gold industry is faring well during the coronavirus pandemic that
is affecting so many other industries around the world, according to
Resources Monitor’s latest report.

Gold prices have been on the
rise for the past 18 months and — unlike other commodities — gold is
continuing to rise this year with the precious metal is set to ride out
the coronavirus storm.

Between January 1 and May 8 of this year,
gold prices have risen by a whopping 12 per cent, according to data from
Markets Insider and Trading Economics.

This is in contrast with
other commodities like iron ore, which dropped by 5 per cent, battery
metals like lithium and nickel, which both dropped by 12 per cent,
thermal coal, which decreased by 22 per cent and of course crude oil,
which plummeted by 53 per cent.

Resources Monitor also attributes
gold’s comfortable position in the market to the attractive margins
being made by key Australian gold producers.

Newcrest Mining for
example, achieved an average gold price of $1569 per ounce at an all-in
sustaining cost (AISC) of $827 per ounce, giving it a price margin of
$742 an ounce.

Saracen Mineral Holdings’ average gold price was
$2228 per ounce with an AISC of $1133 and $1095 margin, while Silver
Lake Resources and Northern Star Resources achieved margins of $790 and
$589 respectively.

These strong prices and margins allow Australian gold miners to expand their existing mines while developing new ones.

This
is reflected in the above companies’ plans, such as Newcrest expanding
Cadia Valley in New South Wales and Saracen escalating the Carosue Dam
mine in Western Australia.

Other companies, such as Regis
Resources and Capricorn Metals are full steam ahead for developing new
gold projects, such as Regis’ McPhillamys project in New South Wales and
Capricorn’s Western Australian project, Karlawinda.

However, the continuation of gold’s strong prices remains up in the air.

“This
cannot be assessed with any confidence,” Resources Monitor stated in
its report. “The sector has always had its bears and bulls, with bears
currently seeing gold as over-priced and bulls seeing prices in coming
months exceeding $US2500 ($3823).

“What can be said with
reasonable confidence is that reflecting Australia’s role as a
cost-effective producer, it will overtake China next year as the world’s
largest gold producer.”

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