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 used in dentistry also because gold alloys are strong, resistant to tarnishing and easy to work.
According to the World Gold Council, trade in physical gold during 2012 amounted to 4452 tonnes. This is almost 1800 tonnes more than world mine production for the year as estimated by the United States Geological Survey (2660 tonnes; adjusted for actual Australian production). World Gold Council data shows jewellery consumed 1908 tonnes, bullion and coins 1582 tonnes and technology applications 428 tonnes. Central Banks were again net purchasers of gold during 2012.
The monthly price of gold started 2012 at US$1744 an ounce (oz) and ended the year at US$1664/oz having bottomed at US$1558 in May and reaching a maximum of US$1776/oz in September (Figure 1). For most of the year the exchange rate between the Australian and United States dollars varied between 1.03 and 1.06, yielding slightly lower gold prices expressed in the local currency. In Australian dollars, the price of gold started the year at $1675/oz and followed a similar price fall, rise and fall course to that expressed in United States dollars, ending the year on $1600/oz. In general, the Australian gold price throughout 2012 was about $50/oz lower than the second half of 2011, but more than $150/oz higher than the first half of the same year (Figure 1). In April 2013, the gold price in US dollars dropped about 25% to US$1200 and subsequently rebounded to around US$1320/oz. Despite being partially offset by a corresponding fall in the Australian/US dollar exchange rate to about 0.93, in Australian currency terms the price of gold fell by about 12.5% to between $1380 and $1450/oz by mid-2013, or similar to values seen throughout 2010. Allowing for inflation, and expressing the gold price in constant 2012 Australian dollars, the current purchasing power of the commodity remains about double that seen between 2000 and 2005. The main impact of the recent, rapid downward correction has been the closure of some high cost mines and an increase in difficulty for companies to raise market capital. Given the continuing demand for gold, observers have suggested that the recent price drop has been driven by a shift in the equities market towards other areas of investment.
Australia's gold resources occur in all States and the Northern Territory (NT) (Figure 2). In 2012, newly identified gold in total JORC Code resources (all categories) amounted to 937 tonnes, a 47 % increase over that delineated during 2011. Total JORC Code resources of gold at December 2012, nett of that lost to mining, rose 686 tonnes to 14974 tonnes, an increase of almost 5% on the previous year. The largest gains were in South Australia (SA), which rose by 240 tonnes, largely because of increases at Olympic Dam (203 tonnes). Other States to enjoy increases were New South Wales (NSW) with an increase of 238 tonnes, mainly because of increases at the Cadia group of deposits (172 tonnes), and in Western Australia (WA) by 200 tonnes spread over a much larger group of deposits. Queensland (Qld) also experienced a modest rise of 67 tonnes in total JORC Code resources. In contrast, Victoria (Vic) total JORC Code resources reduced by 48 tonnes, Tasmania (Tas) by 11 tonnes and the NT by one tonne.
In 2012 Australia's Economic Demonstrated Resources (EDR) of gold increased 756 tonnes to 9909 tonnes (Figure 3), up by 8% on 2011. In contrast to 2011, when the reclassification of Paramarginal Resources resulting from higher gold prices made the largest contribution to growth in EDR, more than 80% of growth in 2012 was derived from additions to resources in the contributing JORC Code categories. The largest growth in EDR by State occurred in SA (381 tonnes), followed by WA (237 tonnes) and NSW (121 tonnes). Only two States, Vic (-18 tonnes) and Tas (-9 tonnes) saw reductions in their EDR. Western Australia continued to hold the largest share of EDR (4295 tonnes or 43% of total EDR), followed by SA (2752 tonnes) and NSW (1766 tonnes). Collectively, these three States hold slightly less than 90% of national EDR.
The 40 largest contributing deposits in 2012 accounted for 75% of national EDR with just over 50% of national EDR derived from the five largest of these deposits — Olympic Dam in SA and Cadia East in NSW, as well as Boddington, Telfer and the Superpit at Kalgoorlie in WA.
Paramarginal Resources of gold declined by 115 tonnes, or 24%, to 372 tonnes in 2012. This reduction was less than 25% of that in 2011, but again, was largely attributed to the sustained relative high price of gold throughout the year. The greatest reduction in the category occurred in WA (by 100 tonnes to 240 tonnes), although the State retained the largest share of this resource category. Queensland held the second largest share of Paramarginal Resources, about 43 tonnes.
Submarginal Resources declined only 13 tonnes in 2012 to 122 tonnes but remained about 2 tonnes higher than the totals for the category in 2009 and 2010. Western Australia experienced a small drop of 8 tonnes to 86 tonnes while Qld’s total increased by about 5 tonnes to slightly less than 20 tonnes. Together, Paramarginal and Submarginal Resources total about 500 tonnes or 5% of resource categories that contribute 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 58 tonnes to 4571 tonnes in 2012 and account for 30 % of gold in all JORC Code categories. Increases in the category were achieved in NSW (130 tonnes), WA (71 tonnes) and Qld (51 tonnes) while SA incurred the most significant loss of 140 tonnes. Western Australia’s Inferred Mineral Resources remain the largest by State or Territory at 1854 tonnes followed by SA with 1018 tonnes and Qld with 691 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 an equilibrium between defining new resources and converting existing Inferred Mineral Resources to those with higher geological certainty.
Accessible Economic Demonstrated Resources
Australia's EDR for gold are essentially unencumbered with around 30 tonnes, or less than 1%, currently unavailable for exploitation. Deposits which contain gold resources that are unavailable for mining include Jabiluka, Koongarra, and Coronation Hill, all of which are located in the NT.
JORC Code Reserves comprise total resources in Proven and Probable Ore Reserves as defined in the JORC Code. In 2012, national JORC Code Reserves declined minimally by 12 tonnes to 4119 tonnes and amounted to 42% of EDR and 28% of total JORC Code resources. The most significant change in JORC Code Reserves occurred in the NT with a loss of 137 tonnes, or 56%, to just 107 tonnes. This loss was offset by gains of 65 tonnes in NSW, 47 tonnes in SA and 20 tonnes in Qld. Changes to JORC Code Reserves in other States were not significant.
Total mineral exploration expenditure, as reported by the Australian Bureau of Statistics, increased by $82.5 million, or 2.3%, to $3656 million in 2012. Exploration expenditure on gold showed a greater percentage increase (4.5%) over the previous year to total $741 million, second only to that spent on Iron Ore ($1163 million). In contrast to 2011, more money was spent on gold exploration in 2012 than on coal ($709 million) or combined base metals ($733 million; lead-zinc-silver and nickel and cobalt).
During the past decade exploration expenditure on gold has remained relatively constant, between $500–750 million expressed in terms of constant 2012 Australian dollars. However, because of the growth in expenditure on other commodities, the percentage spent on gold has fallen from about 50% in 2002 to just over 20% in 2012. In contrast, expenditure on iron ore over the same time period has risen from 6% to 32% and that on coal from 9% to 19% of total mineral exploration expenditure.
On a State-by-State basis, the greatest increase in expenditure on gold exploration was in WA with a $42 million, or an 8.4%, rise to $541 million. The largest percentage increase in expenditure was in Qld with a rise of 40%, or $18.8 million, to a total of $65 million. All other States and the NT experienced lower expenditures on gold exploration with the most significant reductions in the NT and Vic, both decreasing by about $13 million to $60 million and $21 million, respectively.
There is no differentiation in available statistics for gold exploration expenditure in greenfields regions and at existing deposits. Total drilling kilometres for all commodities declined by about 7%, or 780 kilometres, in 2012 to 10190 kilometres. The reduction was split proportionally between greenfields and brownfields with greenfields attracting only 32% of all drilling.
The Perth Mint in WA is the sole refiner of gold in Australia. The mint acquires raw material from domestic mine production, recycled materials and from sources overseas. Total refined gold for 2012 amounted to 309 tonnes, of which 282 tonnes, worth an estimated $15.2 billion was exported. The exported volume was 25 tonnes less than in 2011.
Domestic mine production fell by seven tonnes in 2012 to 251 tonnes, which was 11 tonnes less than the maximum of 261 tonnes in 2010 and about 60 tonnes lower than Australia's highest annual yield of about 310 tonnes in the late 1990's. By State, WA maintained the highest output of gold at 180 tonnes, the same as in 2011. However, its share of production rose 2% to 72% as a result of reduced production in other States (Table 1). The NT was the only jurisdiction in 2012 to see an increase in gold output, up by just one tonne to 10 tonnes. New South Wales gold production retained second position at 26 tonnes, despite dropping by four tonnes on the levels in 2011. Queensland had the third highest production at 15 tonnes.
Table 1: Gold production by State (rounded to the nearest tonne) since 2006. The NT was the only jurisdiction to achieve an increase in output while WA continued to dominate production. Sources: Australian Bureau of Statistics and the Bureau of Resources and Energy Economics.
|2006 (t)||2007 (t)||2008 (t)||2009 (t)||2010 (t)||2011 (t)||2012 (t)|
|New South Wales||27||35||31||25||30||30||26|
Gold was a primary commodity output of about 75 mining and processing activities during 2012, with both open-pit and underground operations. As in 2011, about 20 operations also produced gold as by-product from processing other commodities, such as at Olympic Dam and the Nystar NV Port Pirrie smelter in SA, at Rosebery in Tas, at Northparkes in NSW and at Golden Grove in WA. During 2012, about six operations were placed on care and maintenance or closed, including two in WA, Stone Resources' Brightstar plant near Laverton and Norseman PLC's operations at Norseman. At the end of 2012 more than 20 gold plants were idle, although, many of these have not operated for several years. With the sustained relatively high price of gold at least 15 operations commenced or recommenced production, including Evolution Mining's Mount Carlton Project and Ivanhoe Australia/Inova's Osborne Mine in Qld, along with Doray Minerals' Andy Well Project and Silver Lake Resources' Murchison (Tuckabianna) Project in WA. A further three plants were undergoing construction or refurbishment, including AngloGold Ashanti/Independence Group's Tropicana Project east of Laverton in WA.
Gold deposits can be grouped into a number of geological or metal association types with differing contributions to production and resources (Table 2). In 2012 lode-gold deposits of Archean age yielded 136 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 161 tonnes or 64% of mine production. In contrast, their contribution to EDR amounted to 3643 tonnes or just 37% of the national total. Copper-gold deposits including porphyries produced the next highest quantity of gold at 63 tonnes or about 25% of national mine production. Together with the iron oxide copper-gold deposits (e.g., Olympic Dam), gold output in 2012 from copper associated deposits amounted to 72 tonnes or 29% of national production while their combined contribution to EDR was 5789 tonnes or 58% of the national total. Production for the year from poly-metallic (5 tonnes) and other deposits, including epithermal and antimony-gold deposits, was relatively minor, totalling only 11 tonnes. Poly-metallic and other deposit's contribution to EDR was also proportionally small at only 4% or about 415 tonnes.
Since 2010, the total gold production from all lode gold deposits has amounted to about 530 tonnes while the contribution to EDR from lode gold deposits has grown by 880 tonnes. During the same time period, iron oxide copper-gold and other copper-gold deposits, including porphyries, have yielded just 214 tonnes to total gold production. The growth of 400 tonnes in the contribution to EDR from these types of deposits since 2010 was also less than the contribution from lode gold deposits. However, it should be noted that there are significantly fewer copper-gold deposits (of all types) than lode gold deposits, and the former types are dominated by several large examples, including Olympic Dam (SA), Boddington (WA) and the Cadia group (NSW). In the past episodic substantial resource reviews at these large operations have caused more notable jumps in contribution to EDR in contrast to the more consistent year-on-year increases attributed to lode gold deposits.
Table 2. Economic Demonstrated Resources, Inferred Resources and mine production of gold (in tonnes) for 2012 categorised by deposit type. Also shown are category percentages for respective total resource types and mine production. Lode gold deposits of Archean age dominate current mine production, but lower grade copper-gold deposits of various styles comprise the majority of Australia’s current resources. Other copper-gold/gold-copper deposits include Telfer and Boddington in WA and the porphyry related mineralisation at Northparkes and Cadia in NSW. Data for the mine production figures was provided by Surbiton Associates Pty Limited.
|Deposit Type||EDR||Inferred Resources||Mine Production||Tonnes||%||Tonnes||%||Tonnes||%|
|Lode Au Archean||2668||26.9||1579||34.6||136||54.3|
|Lode Au Proterozoic||788||8.0||411||9.0||13||5.3|
|Lode Au Phanerozoic||187||1.9||610||13.3||12||5.0|
|Iron Oxide Cu-Au||2871||29.0||1127||24.7||10||3.9|
|Poly-metallic base metals||258||2.6||145||3.2||5||2.0|
Based on estimates provided by the USGS and adjusted for Australian figures by Geoscience Australia, world economic resources of gold increased by approximately 1300 tonnes or 3% in 2012 to 54 300 tonnes. Australia, with EDR of 9909 tonnes, or slightly more than 18% of world resources, has the largest share ahead of South Africa with 6000 tonnes (11%), Russia with 5000 tonnes (9%), and Chile with 2900 tonnes (7%). Based on USGS figures, the world produced 2660 tonnes of gold from mining in 2012, equating to about 5% of current resources. Australia's mine production of 251 tonnes, or 9.4% of world production, was second to that of China with 370 tonnes, but ahead of the USA with 230 tonnes, Russia with 205 tonnes and South Africa with 170 tonnes. Over the past decade world mine production has varied between 2260 tonnes in 2008 and 2700 tonnes in 2011. Over the same period consistent increases in China's output from 185 tonnes in 2001 to 370 tonnes in 2012 have been offset by declining production in South Africa, which fell from 402 tonnes to 170 tonnes, Canada from 160 tonnes to 102 tonnes and the USA , which dropped from 335 tonnes to 230 tonnes. Estimated production rates for other countries over the same period are more irregular.
Marginally increased mineral exploration expenditure and a largely sustained and elevated gold price maintained heightened activity in the gold industry throughout 2012. The following selected announcements provide a snapshot of industry activities in 2012.
Altona Mining Limited announced the results of a positive feasibility study for the Little Eva deposit in the Roseby Project (copper-gold) northeast of Mount Isa. The company also stated that Xstrata intended to acquire a 51% interest in the project.
CuDecco Limited obtained State government approval for development of the Rocklands Project 15 kilometres west of Cloncurry. The company also released an intersection of 20 metres at 3.1 grams per tonne (g/t) Au and 76.7 g/t Ag from the Wilgar prospect within Rocklands.
Evolution Mining Limited advised that it had begun commissioning of its 800 000 tonne per annum (tpa) processing plant at Mount Carlton east of Charters Towers.
Ivanhoe Australia Limited (now Inova Resources Limited) recommenced production of copper-gold concentrate and poured its first gold at Osborne south of Cloncurry. The company also announced the results of scoping studies of the Mount Elliott and Swan copper-gold deposits north of Osborne.
Malachite Resources Limited and BCD Resources NL announced a joint development plan for the Lorena deposit east of Cloncurry.
Resolute Mining Limited completed a feasibility study for re-opening of its Sarsfield open-pit at Ravenswood.
Xstrata advised that mining had commenced at its E1 and Monakoff copper-gold deposits at its Mount Margaret Mining Project northeast of Cloncurry.
New South Wales
Cortona Resources Limited (now merged with Unity Mining Limited) received final regulatory approvals for the development of Dargues Reef gold mine south of Braidwood.
Polymetals Mining Limited stated that it had received development consent for its Mount Boppy gold mine at Canbelego east of Cobar.
Regis Resources Limited acquired the McPhillamys gold deposit southeast of Orange from Alkane Resources Limited and Newmont Exploration Limited.
Resource Base Limited commenced production of gold from the Broulia King gold mine southwest of Cowra.
TriAusMin Limited announced that the retreatment of tailings at the Woodlawn mine south of Goulburn would proceed.
White Rock Minerals Limited released the results of a scoping study for the Mount Carrington silver-gold deposits near Drake.
YTC Resources Limited advised that it had completed a $155 million funding arrangement with Glencore International for the construction of the Hera and Nymagee projects southeast of Cobar.
Crocodile Gold Corporation acquired from AuRico Gold Incorporated the Fosterville and Stawell gold mines, northeast of Bendigo and two kilometres from Stawell respectively.
GBM Gold Limited placed its Inglewood plant in central Victoria on care and maintenance.
Morning Star Gold NL produced its first gold from the Morning Star Mine at Woods Point.
Octagonal Resources Limited commenced mining of the Black Reef open-pit at Wehla and began reprocessing tailings from Unity's Kangaroo Flat Mine in Bendigo.
Bass Metals Limited placed the Hellyer operation southeast of Waratah on care and maintenance.
BCD Resources NL recovered the final parcel of ore from the Tasmania Mine, Beaconsfield, and commenced reprocessing tailings from the Lefroy mine north of Launceston.
Frontier Resources Limited intersected 7.7 metres at 5.39 g/t Au and 0.19% bismuth (Bi) at Stormont southwest of Devonport.
Unity Mining Limited intersected 3.15 metres at 268.7 g/t Au from the Read Zone at Henty Gold Mine south of Rosebery.
ABM Resources NL released the results of a scoping study of Old Pirate southwest of Tanami. The company also announced intersections including 42 metres at 44.2 g/t Au and 20 metres at 10.59 g/t Au from the adjacent Golden Hind prospect.
Crocodile Gold Corporation completed mining of the West Howley Pit and commenced mining of the North Point Pit northwest of Pine Creek. The company also received approval for the redevelopment of the International pit at Pine Creek.
Tanami Gold NL substantially upgraded the resource at Groundrush northeast of Tanami to just over one million ounces of contained gold at an average grade of 4.2 g/t Au.
Mungana Goldmines Limited purchased the Tunkillia Gold Mine south of Tarcoola from Minotaur Exploration Limited. The company also announced a drill intersection of 20 metres at 134.1 g/t Au from the deposit.
Exco Resources Limited and Polymetals Mining Limited advised that the Vertigo project northeast of Olary would be developed and that mining had ended at the adjacent White Dam deposit.
Rex Minerals Limited completed a pre-feasibility study of the Hillside deposit on Yorke Peninsula.
Trafford Resources Limited announced an intersection of 93 metres at 1.59 g/t Au at the Weednanna Prospect in its Wilcherry Hill Project north of Kimba.
Barra Resources Limited commenced mining at its Newminster deposit northwest of Coolgardie.
Doray Minerals Limited commenced mining at its Andy Well Project north of Meekatharra.
Integra Mining Limited announced that trial mining was to commence at Cock-eyed Bob southeast of Kalgoorlie and first ore was produced from the adjacent Maxwells open cut.
Metals X Limited acquired Westgold Resources Limited and released the results of a feasibility study on its Central Murchison Project.
Mutiny Gold Limited completed a feasibility study on its Deflector deposit southwest of Yalgoo.
Nex Metals Explorations Limited commenced mining at its Butterfly open pit at the company’s Kookynie Gold Project 200 kilometres north of Kalgoorlie.
Northern Star Resources Limited advised that it had increased plant capacity to 450 000 tpa at its Paulsens Gold Mine in the Ashburton.
Phoenix Gold Limited commenced mining at Catherwood north of Coolgardie.
Ramelius Resources Limited completed mining at Wattle Dam northwest of Widgiemooltha.
Reed Resources Limited commenced commissioning of its Bluebird plant at Meekatharra.
Regis Resources Limited completed a feasibility study and announced plans to develop the Rosemont Deposit north of Laverton.
Saracen Mineral Holdings Limited commenced mining at Red October south of Laverton.
Silver Lake Resources Limited completed the expansion of its Lakewood plant south of Kalgoorlie to 900 000 tpa and commenced mining at its Murchison project.
First gold was poured by Kentor Gold Limited at Burnakura in the Murchison, Millennium Minerals Limited at Nullagine, Ramelius Resources Limited at Mount Magnet and Regis Resources Limited at Garden Well northeast of Laverton.
Kalgoorlie Mining Company Limited suspended mining at its Bullant Mine north of Coolgardie.
Norseman Gold PLC entered voluntary administration and ceased operations at Norseman.
Stone Resources Limited advised that its Brightstar plant southeast of Laverton had been placed on care and maintenance.