To: sea_urchin who wrote (2366 ) 11/29/1998 12:19:00 AM From: Robert Dirks Read Replies (1) | Respond to of 80994
Throw out the charts, production is coming down V.V.V. Saturday November 28, 10:07 pm Eastern Time Australia 1998 gold output seen down at 309 tonnes SYDNEY, Nov 29 (Reuters) - Australian gold production is forecast to decline to around 309 tonnes in 1998 from a record 314 tonnes in 1997, Surbiton Associates Pty Ltd said on Sunday. Production in the three months ended September 30 totalled 74.9 tonnes, marking the third consecutive quarterly decline in mine output, managing director Sandra Close said in Surbiton's Gold Review for the third quarter. ''Given the slight downward trend over the year to date, production will probably be around five tonnes less than 1997's record 314 tonnes,'' Close said. Australia is the world's third largest producer of gold behind South Africa and the U.S. The declining gold yield is the result of several factors, Close said. ''It cannot be explained by the low U.S. dollar price alone,'' she said. ''Exploration has been cut back ... you must explore to find more ore,'' Close said. A lack of support from investors in Australia has forced mining companies to slash their exploration budgets, she said. Moreover, uncertainties about the outcome of Aboriginal native title land claims had hastened a move by some miners to explore for gold outside Australia, she said. ''The effects are now being seen, with fewer new discoveries to replace production from mines which are nearing their end,'' Close said. The only new mine to start producing in 1998 was the Cadia Hill lode in New South Wales owned by Newcrest Mining Ltd , she noted. She said investors have become ''obsessed with the U.S.-dollar gold price,'' which has languished below US$300 an ounce. ''While the U.S. dollar gold price drives market share sentiment, Australian dollar gold prices and production costs affect gold sector profits,'' she said. The Kanowna Belle mine in Western Australia, 50-50 owned by North Ltd and Delta Gold NL , was the lowest cost mine, with a reported cash cost of A$103 an ounce, Close said.