The Fosterville gold mine. Image courtesy of Kirkland Lake Gold Ltd.
With gold reaching a record price of A$2,044 per ounce last month, it’s no surprise that gold mining in Australia is enjoying a fresh wave of interest from investors and consumers alike.
One region in particular, Victoria, has seen production double over the past five years. Regional Victoria is estimated to hold around 80 million ounces of gold underground, based on mine assessments and radar scans of the terrain, and growing demand for gold amidst global economic uncertainty has made gold mining companies hot property once more.
The Fosterville Mine in Bendigo, central Victoria, has a reserve of 2.7 million ounces of high quality gold. New investment into the company has allowed the mining operation to go deeper, which in turn has resulted in a significant increase in the quality of gold. The site is now producing 31 grade gold: that is to say, 31 parts per million. Typically mines produce gold between 4 and 10 parts per million.
Fosterville isn’t the only success in the state though, with the Castlemaine Goldfields mine in Ballarat open once again after 100 years of closure. Other operations, including the Costerfield Mine also near Bendigo, and the Stawell Mine, have resumed operations within the past 12 months.
The other major gold state, Western Australia, hosts the Gruyere gold mine – Australia’s last major gold discovery. Gruyere produced its first gold bar over the weekend since opening in 2013, with estimates that the mining site could produce gold for at least the next 12 years.
A smith hammering gold. Image courtesy of Kirkland Lake Gold Ltd.
Western Australia is also a testing site at present for renewable power. The Agnew Gold Mine has received A$13.5 million to build a combined microgrid of wind turbines, solar panels, and batteries for energy storage. The hope is that such a project – due to be completed in 2020 – would help offset the environmental impact that mining has; minimising disruption to neighbouring populations and opening up new areas for potential exploration.
The final feather in the cap for the region is the work of tech company Clean Mining, who we reported on earlier in June. Their big discovery is a replacement for cyanide in the gold refining process; a dangerous chemical which has limited the operational capacity of some mines and resulted in mining bans in other countries. The non-toxic nature of the replacement, coupled with the massive cost reduction in using it compared to cyanide, looks set to make this Australian firm a big hit in the global precious metal mining industry.
This morning the Australian Department of Industry issued a quarterly report on Resources and Energy, in which it said that the growing demand for gold was to elevate it to Australia’s fourth largest export earner, and with the gold price still high at A$1,986.66, the hope is that physical gold is entering a new bear market that will revive global gold mining and guarantee the future of the industry for decades to come.