COMMODITY CAPERS: According the Office of the Chief Economist, gold prices are projected to rise gradually over the next five years, to an average US$1,428 an ounce (2019 dollars) in 2024.
This is predicted to maintain gold’s status as a haven asset and in turn fuel investor demand over the short term as world mine supply declines from 2020.
In its March Resources and Energy Quarterly Report, our chief economist reported that world gold production is projected to fall after 2020, as some long and large established mine projects in Australia and other major gold producing countries reach the end of their life.
Global gold consumption is projected to fall after 2020, driven by falling central bank purchases and industrial demand, however the demand for jewellery in countries such as China and India is expected to offset this decline.
The value of Australia’s gold exports is forecast to peak in 2019–20 at nearly $22 billion (in 2018/19-dollar terms), driven by higher prices and export volumes.
Export values are projected to decline to $16 billion by 2023–24, due to lower domestic production and export volumes.
Australian gold mine production is forecast to increase by 6.8 per cent in 2018/19 and 6.9 per cent in 2019/20, reaching a peak of 346 tonnes in 2019-20.
The chief rattled off all the usual suspects, such as Northern Star and Evolution, but also had room for a special mention for Gold Road Resources and its Gruyere gold mine that is due to come on stream early this year with forecast annual production of 8.4 tonnes.
Delegates attending the RIU Sydney Resources Roundup in May will find there will be plenty of up and coming gold exploration plays to get their teeth into.
Breaker Resources NL (ASX: BRB)
Breaker Resources has been busy at the company’s Lake Roe project, 100 kilometres east of Kalgoorlie in Western Australia.
Drilling undertaken by Breaker extended the strike length of mineralisation at its Bombora gold discovery by 700 metres to 3.2 kilometres whilst enhancing its underground mining potential.
Breaker has continued drilling with four rigs in action to extend and upgrade the Bombora deposit, and to identify the outer limits of initial open pit mining to finalise an open pit Pre-Feasibility Study (PFS).
The company plans to update the existing 1.1 million ounce gold Resource in the June quarter that will include results from drilling the 700m of strike length which has been added since the Resource was last calculated.
After two years of resource drilling, Bombora remains open in every direction and new zones of mineralisation were still being discovered.
Cygnus Gold Limited (ASX: CY5)
Cygnus Gold has a portfolio of 100 per cent-owned projects in the Wheatbelt region of Western Australia.
The projects range in developmental stage from early exploration areas through to advanced, drill-ready targets where high-grade gold results were achieved in drilling by previous explorers.
Recent activity has been happening within the Stanley project, with drilling targeting the Kepler Zone.
Cygnus Gold identified the Kepler Zone via a detailed review of drillhole STRC0002, drilled in late 2018 that ended in mineralisation.
Resampling of the original mineralised intercepts returning encouraging results.
The Kepler Zone is adjacent to Cygnus’ shallow high-grade Bottleneck gold prospect and the drilling program will initially target a metadacitic rock unit that has only been lightly tested by deeper drilling at Bottleneck.
The drilling is targeting extensions to the McDougall South prospect along the Stanley greenstone belt where drilling intersected gold mineralisation associated with a zone of anomalous gold within a structural zone along the central Stanley fold structure.
De Grey Mining LTD (ASX: DEG)
De Grey Mining is running an exploration program focused on the upgrade and expansion of known resources, as well as in the discovery of new deposits at the company’s Pilbara gold project south of Port Hedland in the Pilbara Region of Western Australia.
De Grey Mining believes in the potential of the Pilbara gold project to define additional resource ounces along the existing 200 kilometres strike length of mineralised shears zones, throughout the 1,500 square kilometre landholding.
Exploration carried out by De Grey to date has entailed detailed shallow RC and diamond drilling of approximately 10 per cent of the shear zones around 100m to 150m, from which the company has identified approximately 1.4 million ounces of gold resources.
The largest deposit within the project are is the 6.37 million tonnes at 1.8 grams per tonne gold for 377,300 ounces Withnell deposit.
Recent drilling at Withnell continued to enhance its resource potential, returning:
LODE 1 (West)
8 metres at 20.11 grams per tonne gold from 168m, including 4m at 38.5g/t gold;
LODE 1 (East)
5.47m at 4.57g/t gold from 293m;
16m at 4.21g/t gold from 94m, including 1m at 29.3g/t gold; and
4m at 16.4g/t gold from 240m.
De Grey considers Withnell, along with the Toweranna and Wingina deposits to have potential to increase underground resources to positively impact the expanded 2 million tonnes per annum Pre-Feasibility Study (PFS) currently underway.
First Au Limited (ASX: FAU)
First Au is drilling at the company’s 100 per cent-owned Gimlet gold project, just outside Kalgoorlie in Western Australia.
First Au is following up a RC drilling program it completed in December 2018 and earlier aircore drilling that returned several strong high-grade gold intersections, including 4 metres at 393 grams per tonne gold from 52m.
Early results from the RC drilling outlined mineralisation over 400m of strike length encouraging FAU to begin work on a potential JORC Resource.
Although primarily focussed on targeting shallower oxide mineralisation, a decision to push the drilling deeper led to the claim of a new lode gold discovery, which appears open at depth.