Latest news with #SurbitonAssociates
West Australian
03-08-2025
- Business
- West Australian
ASX-listed gold miners arrive at Diggers & Dealers with more than $7.5b of cash and bullion to play with
Local gold miners are making the annual pilgrimage to Kalgoorlie while carrying piggy banks bursting at the seams. The Diggers & Dealers Mining Forum begins in the gold heartland on Monday after a record year for the precious metal. Gold miners were already flying high at last year's Diggers & Dealers and since then bullion's value in Australian dollar terms has surged another 38 per cent to $5120 an ounce. ASX-listed producers of the precious metal are now flush with funds — collectively holding more than $7.5 billion of cash and bullion at June 30. How those riches will be spent, or not spent, is set to dominate conversation among the 2000-plus attendees at the three-day conference. 'Perhaps they could be used for further acquisitions although prices now paid to obtain such new assets are very high,' Surbiton Associates director Sandra Close said. 'The concern is that the larger the cash reserves become, the more the company may become a tempting takeover target.' Dr Close, who has been a gold industry analyst for three decades, said there was 'another rather obvious solution'. 'I am sure that shareholders would love to see higher dividends.' A wave of consolidation has already swept through the gold industry over the past 18 months, with about $9 billion of mergers between Red 5 and Silver Lake Resources, Westgold Resources and Karora Resources, and Ramelius Resources and Spartan Resources. Gold mines and early-stage developments have also been snapped up at a premium left, right and centre across WA. South Africa's Gold Fields in May shook hands with Gruyere mine partner Gold Road Resources to buy its half stake in the Goldfields project for $3.7b in cash and shares. A day prior to this handshake, Northern Star Resources wrapped up its all-stock deal to take control of De Grey Mining and its prized Hemi development in the Pilbara for $6b. Northern Star has the biggest pile of cash and bullion among miners listed on Australia's bourse. It held $1.9b at June 30, well ahead of Ramelius in second place at $810m. Evolution Mining had $760m, Vault Minerals $686m, Greatland Gold $575m and Regis Resources $517m as the other local miners with liquid asset balances over half a billion dollars by the end of FY2025. While gold chiefs are poised to chest-beat at Kalgoorlie's Goldfields Arts Centre's lectern, their battery metals counterparts will cut forlorn figures for the second year in a row. Some, like IGO's Ivan Vella, have decided not to front. WA's once-thriving nickel industry is one mine closure away from complete collapse, lithium remains in the doldrums and no local rare earth element explorers of note had a bumper year. Uranium has also lost its glow. The radioactive commodity became a hot topic at last year's Diggers & Dealers after former Coalition leader Peter Dutton gatecrashed the conference to spruik his nuclear energy policy. Mr Dutton's election failure in May and weakening uranium prices over the past 12 months have largely killed the hype. A notable absence at this year's forum will be the presence of any of the three biggest miners in the State — BHP, Rio Tinto and Fortescue. Fortescue presented last year via Kristen Pelc, a corporate development manager, and BHP had a booth — infamously an empty one after announcing a month prior to the conference that is sprawling Nickel West arm would into care and maintenance.
West Australian
08-06-2025
- Business
- West Australian
Higher gold prices lead to reduction in production during March quarter, Surbiton Associates say
An Australian dollar gold price heading towards $5000 an ounce has actually driven a reduction in production of the precious metal across the country, Melbourne-based industry analysts Surbiton Associates say. Surbiton said Australian gold mine production totalled 73 tonnes in the March quarter, six tonnes less than in the December quarter but three tonnes more than the March quarter of 2024. This took place as the London Bullion Market Association gold price ranged between $US2633/oz and $US3115/oz, which in Australian dollar terms was $4232/oz to $4960/oz. 'Effectively, the recent decline in Australian gold production was largely the result of higher gold prices,' Surbiton Associates director Dr Sandra Close said. 'At today's gold price the March quarter's output is worth over $12 billion, so understandably many producers are optimising their operations in response to such price increases.' Dr Close said the higher gold price had made lower cut-off grades economic because what was unprofitable to mine and treat in the past had now become profitable. 'If operations are able to lower their cut-off grades, then a greater amount of gold is recovered from each orebody,' she said. 'Also, higher gold prices mean that it is economic to reclaim more low-grade material from stockpiles to feed into the treatment plants, so the weighted average head grade of ore being treated declines. 'Although lower head grades result in less gold being produced and means cash costs and AISC costs per ounce increase, the value of each ounce of gold is higher. 'Surbiton Associates' latest analysis shows that low-grade, reclaimed stockpiled material is currently as high as around 15 per cent of the total ore being treated. 'Thanks to increasing gold prices, the proportion of low-grade material being blended into feed has risen steadily for the last five quarters, from a proportion of only around one per cent a year ago.' Dr Close said that it might be thought that higher prices should also stimulate gold output by encouraging the start-up of new projects and the re-commissioning of old projects on care and maintenance. However, she said many existing plants were now running close to their limit, so there was a shortage of immediate treatment capacity for emerging small miners wanting to sell parcels of ore or to have their ore toll-treated. 'On the face of it, lower gold production and rising costs per ounce might suggest that the gold industry in Australia is in trouble,' Dr Close said. 'Far from it. Many gold producers are experiencing high margins and are doing very well.' Those mines reporting substantially lower gold production in the March quarter included Tropicana 330km north-east of Kalgoorlie-Boulder down 57,000oz, St Ives south of Kambalda down 40,500oz, and Tanami in the Northern Territory down 46,000oz. Among the operations reporting increased gold production were the Cadia mine in New South Wales up 25,000oz, Bellevue north of Leinster up 22,000oz, and Fosterville in Victoria up 7000oz. Boddington south-east of Perth produced the most gold during the quarter, 126,000oz, while Tropicana churned out 105,267oz, Cadia 103,000oz, Kalgoorlie-Boulder's Super Pit 99,998oz, and Telfer 90,172oz.
