Gold

The principal uses for gold (Au) are as an investment instrument for governments, central banks and private investors, and as jewellery, which accounts for most of its annual usage. The main industrial use for gold is in the electronics industry, taking advantage of its high conductivity and corrosion-resistance properties. Small amounts of gold are present in most modern electronic devices. Gold is also used in dentistry because gold alloys are strong, resistant to tarnishing and easy to work.

According to the World Gold Council trade in physical gold during 2014 amounted to 3924 tonnes. This is almost 1800 tonnes more than world mine production for the year (2860 tonnes) as estimated by the United States Geological Survey (USGS). World Gold Council data shows jewellery consumed 2153 tonnes, bullion and coins 905 tonnes and technology applications 389 tonnes. Central banks were net purchasers of gold during 2014 acquiring 477 tonnes of gold.

The monthly average price of gold started 2014 at US$1245 an ounce (oz) and ended the year at US$1201/oz having bottomed at US$1176 in November and reaching a maximum of US$1336/oz in March (Figure 1). In 2014, the Australian dollar bought between US$0.82 and US$0.94 yielding slightly higher gold prices expressed in the local currency. In Australian dollars, the price of gold started the year at $1420/oz and followed a similar price trajectory to that expressed in United States dollars, ending the year on $1464/oz.

Monthly gold price in US$ and AU$ (dollars of the day) since January 2000. The data series were derived from Reserve Bank of Australia figures.

Figure 1 Monthly gold price in US$, AUD$ (dollars of the day) and constant 2014 AUD$ for the period January 2000 to December 2014. The gold price time series in US$ was derived from Bank of England data, the exchange rate from WM/Reuters, and deflation factors from the Reserve Bank of Australia.

Resources

Australia's gold resources occur in all states and the Northern Territory (Figure 2). As at December 2014, total resources of gold compliant with the Joint Ore Reserves Committee (JORC) Code fell 793 tonnes to 14 016 tonnes, a decrease of 5% on the previous year. Resource increases were reported in Victoria, up 54 tonnes, and Queensland, up 5 tonnes.  All other states experienced a decrease with Western Australia decreasing by 356 tonnes, South Australia by 288 tonnes, New South Wales by 193 tonnes, the Northern Territory by 23 tonnes and Tasmania by 1 tonne.

Gold deposits with JORC compliant Resources highlighting those with more than 30 tonnes of contained gold. The backdrop is sourced from Geoscience Australia¿s 1:5m Georegions map.

Figure 2 Gold deposits with JORC compliant Resources highlighting those with more than 30 tonnes of contained gold as at December 2014. The backdrop is sourced from Geoscience Australia's 1:5M Georegions map.

In 2014 Australia's Economic Demonstrated Resources (EDR)1 of gold decreased 696 tonnes to 9112 tonnes (Table 1; Figure 3), down by 7% from 2013. The largest growth in EDR occurred in the Northern Territory (up 36 tonnes) and Victoria (up 28 tonnes). The remaining states saw reductions in EDR with Western Australia (down 358 tonnes), South Australia (down 288 tonnes), New South Wales (down 36 tonnes) and Tasmania (down 3 tonnes). Western Australia continued to hold the largest share of EDR (3524 tonnes or 39% of total EDR), followed by South Australia (2504 tonnes) and New South Wales (1760 tonnes). Collectively, these three states hold slightly more than 85% of the national EDR.

Table 1 Australia's resources of gold and world figures as at December 2014.

Commodity Units Australia World
JORC Reserves (a)
(% of Accessible EDR)
Demonstrated ResourcesInferred Resources (c)Accessible EDR (d)Mine Production 2014 (e)Economic Resources 2014 (f)Mine production 2014 (g)
Gold T Au3550 (39%)945145629082274550003114

The 42 largest contributing deposits in 2014, with an EDR in excess of 30 tonnes, accounted for 72% of the national EDR. Just over 45% of the national EDR was derived from the five largest of these deposits namely – Olympic Dam and Carapatenna in South Australia, Boddington and Telfer in Western Australia and Cadia East in New South Wales.

Paramarginal Resources of gold declined by 73 tonnes, or 21%, to 244 tonnes in 2014 (Table 1). The greatest reduction in this category occurred in Western Australia (by 43 tonnes to 142 tonnes), although the state retained the largest share of this resource category. Queensland held the second largest share of Paramarginal Resources, about 33 tonnes.

Submarginal Resources declined by 15 tonnes in 2014 to 95 tonnes (Table 1). The majority of the decline in Submarginal Resources came from Western Australia which experienced a drop of 15 tonnes to 68 tonnes. Together, Paramarginal and Submarginal Resources total about 339 tonnes or 4% of resource categories that contributes to EDR. Gold in Paramarginal and Submarginal Resources has declined by about 1100 tonnes since 2009.

Australia's Inferred Mineral Resources of gold rose marginally by 42 tonnes to 4562 tonnes in 2014 and account for 30% of gold in all JORC Code categories. Increases in Inferred Resources were achieved in South Australia (116 tonnes), Western Australia (24 tonnes) and Queensland (14 tonnes) while New South Wales incurred the most significant loss (74 tonnes). Western Australia's Inferred Mineral Resources remain the largest by state or territory at 1865 tonnes followed by South Australia with 1146 tonnes and Queensland with 652 tonnes. Since an abrupt increase of about 1100 tonnes in 2004, due mainly to a substantial increase at Olympic Dam, the amount of gold in this category has remained relatively constant. In general, the trends in the data over recent years indicate equilibrium between defining new resources and converting existing Inferred Mineral Resources to those with higher geological certainty.

Contained gold in the various Geoscience Australia groupings of JORC Code categories through time from 1995 to the present. Economic Demonstrated Resources (EDR) consisting of total JORC Ore Reserves (blue) and Measured and Indicated Mineral Resources deemed to be economic (green); Paramarginal Resources (yellow); Submarginal Resources (red); and Inferred Mineral Resources (orange). The EDR of gold for 2012 constitutes 66% of total JORC Code resources.

Figure 3 Contained gold in the various Geoscience Australia groupings of JORC Code categories through time from 1995 to the present. Economic Demonstrated Resources (EDR) consisting of total JORC Ore Reserves (blue) and Measured and Indicated Mineral Resources deemed to be economic (green); Paramarginal Resources (yellow); Submarginal Resources (red); and Inferred Mineral Resources (orange).

Accessible Economic Demonstrated Resources

Australia's EDR for gold is essentially unencumbered with around 30 tonnes, or less than 1%, currently unavailable for exploitation. Accessible EDR in 2014 was 9082 tonnes (Table 1). Deposits that contain gold resources that are unavailable for mining include Jabiluka, Koongarra and Coronation Hill, all of which are located in the Northern Territory.

JORC Reserves

JORC Code Reserves comprise total resources in Proven and Probable Ore Reserves as defined in the JORC Code. In 2014, national JORC Code Reserves declined by 353 tonnes to 3550 tonnes and amounted to 39% of EDR and 26% of total JORC Code resources. The most significant change in JORC Code Reserves occurred in Western Australia with a loss of 312 tonnes, or 19%, to 1451 tonnes. The largest gain was in South Australia with an increase of 35 tonnes to 560 tonnes, or 7%.

Exploration

Total mineral exploration expenditure, as reported by the Australian Bureau of Statistics, decreased by $685.6 million, or 27%, to $1837 million in 2014. Exploration expenditure on gold also decreased (32%) over the previous year to total $377.3 million, second only to that spent on iron ore ($592.2 million).

Production

Gold is mined in all states and the Northern Territory in Australia.  The Perth Mint in Western Australia is the sole refiner of gold in the country. The mint acquires raw material from domestic mine production, recycled materials and from sources overseas. Total refined gold for 2014 amounted to 303 tonnes of which 287 tonnes, worth an estimated $13.1 billion, was exported. The exported volume was 6 tonnes more than in 2013.

Domestic mine production increased 9 tonnes in 2014 to 274 tonnes. By state, Western Australia maintained the highest output of gold at 189 tonnes, slightly higher than in 2013. Western Australia's share of production was 68% followed by New South Wales with 12% and Queensland with 5% (Table 2). Four jurisdictions recorded an increase in gold output, Western Australia up 6 tonnes, New South Wales up by 2.6 tonnes, the Northern Territory up by 1 tonne and Victoria up by 0.2 tonnes. All other jurisdictions had minor falls in gold output.  New South Wales gold production retained second position at 35 tonnes, returning to 2007 levels of production.  Queensland had the third highest production at 16 tonnes.

Table 2 Gold production by state (rounded to the nearest tonne) since 2007. Western Australia, New South Wales, the Northern Territory and Victoria achieved an increase in output while Western Australia continued to dominate production. Sources: Australian Bureau of Statistics and the Office of the Chief Economist.

 

2007(t)

2008(t)

2009(t)

2010(t)

2011(t)

2012(t)

2013(t)

2014(t)

New South Wales

35

31

25

30

30

26

32

34

Victoria

6

5

8

7

5

4

6

7

Queensland

21

18

16

15

16

15

17

16

Western Australia

155

134

152

181

180

180

183

189

South Australia

7

7

8

13

14

12

13

13

Tasmania

4

5

4

4

4

3

2

2

Northern Territory

17

15

10

10

9

10

12

13

Australia Total

245

215

223

260

258

251

265

274

Gold was a primary commodity output of about 75 mining and processing activities during 2014, with both open-pit and underground operations. As in 2013, about 20 operations also produced gold as by-product from processing other commodities.

Gold deposits can be grouped into a number of geological or metal-association types with differing contributions to production and resources. In 2014, lode-gold deposits of Archean age yielded 153 tonnes or 54% of Australian mine production, more than double the next largest producing type, copper-gold deposits. Output in the year from all lode-gold types amounted to 182 tonnes or 65% of mine production. In contrast, their contribution to EDR amounted to 3643 tonnes or just 39% of the national total. Copper-gold deposits including porphyries produced the next highest quantity of gold at 70 tonnes or about 25% of national mine production. Together with the iron oxide-copper-gold deposits (e.g., Olympic Dam), gold output in 2014 from copper-associated deposits amounted to 82 tonnes or 29% of national production while their combined contribution to EDR was 5361 tonnes or 58% of the national total. Production for the year from polymetallic (5 tonnes) and other deposits, including epithermal and antimony-gold deposits, was relatively minor, totalling only 13 tonnes. Polymetallic and other deposits’ contribution to EDR was also proportionally small at only 5% or about 467 tonnes. Data for the mine production figures was provided by Surbiton Associates Pty Limited.

World Ranking

Based on estimates provided by the USGS and adjusted for Australian figures by Geoscience Australia, world economic resources of gold increased by approximately 1000 tonnes or 3% in 2014 to 55 000 tonnes. Australia, with EDR of 9112 tonnes, or slightly more than 17% of world resources, has the largest share ahead of South Africa with 6000 tonnes (11%), Russia with 5000 tonnes (9%) and Chile with 3900 tonnes (7%). Based on USGS figures, the world produced 3114 tonnes of gold from mining in 2014, equating to about 6% of current resources. Australia's mine production of 274 tonnes, or 9% of world production, was second to that of China with 450 tonnes, but ahead of the Russia with 245 tonnes, USA with 211 tonnes and Canada with 160 tonnes.

Industry Developments

The following selected announcements provide a snapshot of industry activities in 2014.

Queensland

Evolution Mining Ltd reported the discovery of new mineralised structures in the Camembert prospect at the Pajingo mine. The drilling program comprised six holes with all intercepting epithermal-textured quartz veins with drill results of 8.13 grams per tonne (g/t) Au from 493 m, including 2.7 m at 11.65 g/t Au; 7.3 m at 6.18 g/t Au from 570.8 m, including 3.7 m at 9.37 g/t Au.

Resolute Mining Ltd announced a new Proven and Probable Reserve for Mount Wright of 4.1 million tonnes at 2.7 g/t Au for 352 000 oz. The new figure increases the reserve by 46% and extends the mine life by 14 months.

Resolute Mining Ltd also announced a new 1.28 million oz gold resource at Buck Reef West which lies adjacent to the Sarsfield deposit. The updated Buck Reef West resource inventory comprises 41.8 million tonnes at 0.9 g/t Au for 1.28 million oz with 70% of the resource in the Measured and Indicated categories.

New South Wales

Aurelia Minerals announced the first pour of gold and silver from the Hera mine.

Unity Mining Ltd reported on recent exploration drilling at its Booth's Reward prospect. The drilling program comprised six holes for 567 m of reverse-circulation (RC) drilling. The intersections included 20 m at 2 g/t Au, including 3 m at 6.6 g/t Au.

White Rock Minerals Ltd has completed a scoping study for a new mine at the Mount Carrington project. The project would produce 30 000 oz per annum with a total production of 93 000 oz of gold.

Tasmania

Unity Mining Ltd reported on exploration drilling results at the Henty gold mine. Initial drill results have identified a continuation of alteration and mineralised zones approximately 70 m south of both the Read and Darwin South orebodies. Results from this program include intervals of 3.1 m at 8.2 g/t Au and 1.6 m at 15.5 g/t Au in Darwin South.

Northern Territory

ABM Resources NL mine management plan for the Old Pirate gold project was approved by the Northern Territory Department of Mines and Energy.

Emmerson Resources Ltd and Evolution Mining Ltd commenced a drilling program at Tennent Creek. The program comprises 2500 m of both diamond and RC drilling aimed at identifying further high-grade gold resources around the Eldorado and Chariot deposits.

Ark Mines Ltd reported on a 26-hole drilling program at the Golden Honcho prospect at Frances Creek. Highlights include: 2 m at 21 g/t Au; 2 m at 11.9 g/t Au; 2m at 10.5 g/t Au; and 3 m at 7.5 g/t Au.

South Australia

WPG Resources Ltd has purchased the Tunkilla and Tarcoola gold projects previously owned by Mungana Goldmines Ltd.

Western Australia

Doray Minerals Limited announced an extensive exploration drilling program at the Andy Well gold project located 45 km north of Meekatharra. The drilling will target the Judy and Suzie zones and near-mine exploration targets as well a carry out first-pass drilling on the Margaret and Kristy structures.

Echo Resources Ltd announced exploration drill results from the Julius project. The drilling has confirmed the presence of gold in oxide and fresh-rock units. This drilling has identified a significant width of gold mineralisation with drill results of 6 m at 6.6 g/t Au (including 2 m at 13.5 g/t Au).

Excelsior Gold Ltd announced a maiden Reserve for the Kalgoorlie North project of 5.7 Mt at 2.2 g/t. The Kalgoorlie North project is located 30 km north of Kalgoorlie.

Gold Road Resources Ltd reported on drilling results at the Gruyere project, including 238.3 m at 1.21 g/t Au from 41 m, 104.5 m at 1.94 g/t Au from 77.7 m and 169.2 m at 2.15 g/t Au from 62.8 m.

Millennium Minerals Ltd announced a revised mining schedule at its Nullagine gold operation that has the mine operating until December 2019 and forecasts mining and processing of 9.8 Mt at an average grade of 1.52 g/t Au.

Northern Star Resources Ltd announced high-grade drilling results from Pegasus deposit which is part of the East Kundana Joint Venture. The results included 9 m at 37.8 g/t Au.

Norton Gold Fields Ltd has announced gold production guidance figures for its Paddington operations revised to 176,000-184,000 oz for the 2014 calendar year.

Ramelius Resources Ltd announced an update to the Mineral Resource estimate for the Vivian gold project.  The total estimate now stands at 805,000 tonnes at 7.1 g/t Au for 185,000 contained oz, an increase of 16% on the previous Vivien gold resource estimate.

Regis Resources Ltd had to suspend operations at the Duketon gold project after heavy rains flooded the Garden Well, Rosemount and Moolart pits.

Phoenix Gold Ltd completed a feasibility study for the Red Dam and Castle Hill projects.

Phoenix Gold Ltd announced the start of mining at the Kintore West open-cut mine, which is part of the Castle Hill Stage 2 project. The initial stage of mining delivers 380,000 tonnes of mill feed grading 2.03 g/t Au for 24,400 oz over eight months.

Primary Gold Ltd announced a 21% increase in resources at the Mt Bundy project.

Resource and Investment NL is undertaking a feasibility study at Grosvenor gold project. New drill results were also reported from the Ricks prospect and the Callies and Yararweelor open pits. Ricks prospect returned drill results of 10 m at 3.9 g/t Au.

Senior, A.B., 2016. Australian Resources Review: Gold. Geoscience Australia, Canberra, Australia.


Economic Demonstrated Resources (EDR) is the category with the highest economic feasibility and geological assurance in the National Classification System for Identified Mineral Resources. EDR essentially combines the JORC Code categories of Proven and Probable Ore Reserves and Measured and Indicated Mineral Resources. For more information, see Appendix 1 in Australia’s Identified Mineral Resources 2013.