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Solid gold

By Richard Webb
THE AGE May 14, 2006

Eureka! Gold at a 26-year high is underpinning a potential $900 million-a-year gold rush in Victoria that could deliver an economic boost of twice that annually for the state and provide more than 1000 jobs directly and 4000 jobs in total.

It has taken 150 years but gold is once again becoming a key driver of Victoria's fortunes.

New technology and modern mining methods are enabling mining companies to revisit the big goldfields of yesteryear that provided much of Victoria's initial wealth. Miners can go deeper than before, seeking out sweet spots more effectively and extracting gold from quartz at levels that back then would have been too small.

The sums involved are huge and growing with the rocketing global gold price.

It is reckoned that 80 million ounces (2260 tonnes) of gold were mined in Victoria during the gold rush of the 1850s. The mining industry believes that at least that amount again was left behind, potentially much more.

With gold at $US714 an ounce (close to a record $A926), that's a $A74 billion haul as a minimum, with a potentially bigger knock-on effect among Victoria's regional communities such as Bendigo and Ballarat, where mining will occur.

The gold price is up 38 per cent since the start of the year and this is making mining more attractive. Gold mines have relatively fixed production costs per ounce, so every $1 lift in the price above their cost level drops straight through to a mining company's bottom line. The rising price is also leading to a surge in gold exploration in the state, which augurs well for the industry's future here.

Chris Fraser, executive director of the Minerals Council of Australia, said all the world's major gold producers are exploring in the state. "Victoria might have been where the gold rush started, but geologists tell me that it is the least explored of all states with modern mining methods."

Mr Fraser said this gold boom was part of a larger minerals boom in Victoria. "We have traditionally accounted for 5 per cent of Australia's minerals production but that's grown with the development of mineral sands in the Western District and there's huge interest in the Latrobe Valley coal fields."

Victoria produces about 250,000 ounces of gold a year but the Minerals Council expects this to top more than 1 million ounces a year within a few years, and be sustained at that level and above for the next 20 years.

Currently, mines at Stawell and Fosterville, near Bendigo, that are delivering the goods. Leviathan Resources' Stawell mine is the state's biggest producer at present and is expected to get near 130,000 ounces this year on the way to 150,000 ounces. Perseverance's Fosterville project is also being expanded to produce 150,000ounces a year. But there is much production coming on stream.

Ballarat Goldfields made its first gold pour a few months ago from a mine beneath the town. This mine will reach 200,000 ounces a year within three years and yield a total of 8.3 million ounces.

The biggest project of them all though comes on stream in a few weeks - Bendigo Mining's development of the Bendigo Goldfield. This is expected to crank up in June and reach 500,000 ounces a year within a few years. It is potentially one of the world's largest and highest-grade new gold projects.

The Bendigo Goldfield produced 22 million ounces of gold over a century of mining, making it the second-biggest goldfield in Australia after Kalgoorlie's Golden Mile, and is estimated to contain high-grade gold mineralisation of more than 11 million ounces beneath the historic workings.

"We are going to reach 1 million ounces a year, no doubt about it," Mr Fraser said. "The CSIRO has been saying it for some time but no one has been taking any notice."

Some of the recent exploration results have been promising too, with Goldstar's Walhalla goldfield in Gippsland firming up as a potential 3.5 million-ounce resource, 92 years after it was last worked.

The economic research unit of La Trobe University recently released a report on the expected economic impact of the Bendigo gold mine as it ramps up production to an estimated 600,000 ounces a year by 2012. It expected the revenue from the mine would grow to an anticipated $330 million a year in that time and that the flow-on spending in the region would expand the economy by more than $600 million a year. It was also estimated that the project would deliver 2,100 jobs, including 580 directly at the mine, and would lift Bendigo's regional production by 9 per cent.

Perth's Beach
3,387 Posts
Sounds great for Victoria. Not trying to start a shite fight but whilst on the subject, this is the situation in WA.

Gold rush on Perth's doorstep


The sleepy town of Boddington, 130km south-east of Perth, is experiencing a modern-day gold rush as it prepares to host what will be Australia's biggest gold mine.

Property prices have skyrocketed, vacant land has been snapped up and confidence in the area is at an all-time high as the owners of the Boddington Gold Mine finalise their plans to spend $1.8 billion reopening and expanding the project.

Since the mine was closed in 2001, gold prices have soared and a final decision is due within a fortnight. But detailed planning is already under way to accommodate a construction workforce of 1000 at a camp on the outskirts of Boddington.

During the two-year construction phase, it is estimated $39 million could be injected into the Peel region and $410 million into the WA economy. During its 15-year life, the mine is expected to add $550 million to the Peel economy and $770 million State-wide.

It is predicted another 300 homes will be needed in Boddington to house up to 60 per cent of the 650 permanent workers needed at the mine from 2008. The rest are expected to travel from as far away as Perth and Mandurah.

Boddington Shire chief executive Peter Bradbrook said serious infrastructure shortfalls had to be fixed if the town was to cope with the predicted doubling of its population of 1000.

Further housing development could not take place until there was an upgrade of the water supply and the infill sewerage program was brought forward.

Mr Bradbrook said these and other needs would be included in a submission to State Cabinet.

The area was also seeking a new medical centre, an indoor recreation centre, assistance to attract and house support staff, along with plant and equipment.

Peel Development Commission chief executive Maree De Lacey said the organisation had briefed new Peel Minister Norm Marlborough on the issue this week.

Boddington real estate agents say house prices have skyrocketed in the past six months and they are fielding endless calls from investors and prospective employees. There has also been a flow on to surrounding towns.

Lisa Carrotts, from CRT Rural and Metro Realty, said a year ago four-bedroom, two-bathroom homes were selling in Boddington for about $140,000. Today they were more than $300,000. Two years ago she had up to 30 listings, she now has one.

Ms Carrotts and husband Paul, the deputy shire president, are about to start work on a four-unit retail development, the first of its kind in the quiet main street.

Next door, a new post office is about to be built while the local hardware store has doubled its floor space.

"Everyone in business here is getting a bit excited and hoping to get a slice of the cake," Cr Carrotts said.

As a local of 45 years, Cr Carrotts described it as an exciting time for Boddington.

"We have been waiting nearly six years for this," he said. "They have done a couple of studies but this is the best one."

US gold giant Newmont this week bought out Newcrest Mining's share in the mine for $225 million.

Newmont now holds two-thirds of the mine and AngloGold Ashanti one-third.

If the final go-ahead is given on February 27, Boddington could rank alongside Newcrest's Telfer gold mine in the Pilbara as Australia's biggest, producing almost a million ounces of gold and 32,000 tonnes of copper a year.

*Green light for $1.9bn gold venture
One of the world's largest gold projects, the Boddington mine in Western Australia, has been approved by Newmont Mining and AngloGold Ashanti, which will spend $US1.4 billion ($1.9 billion) to develop it.
The Financial Review 01/03/2006

Proud "Pricktorian"
552 Posts
The thing most would laugh at is that when the initial gold rus happened in Ballarat, they built the township to support the miners (and what still exists today) mined the area dry, and recently realised that we never really checked where the township is if there was gold down there, and sure enough, there are gold reefs there, so rather than bulldoze the town (which would never happened) they mined under the town, would make you feel pretty uneasy if you had a house there somewhere.

460 Posts
If the mining companies need more miners then they should hire lots of unmarried women who are looking for husbands, and production of the precious yellow stuff will skyrocket!
4 Posts
"Theres gold in them there hills"! :cheers:
Interestingly, its thought that there maybe just as much gold still to be mined in the Victorian goldfields as was in the 1850s to 1890s.

1,788 Posts
I suppose that it will all depend if the gold price stays high and nobody can predict that.
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