Australian gold producers are banking record profits

Spot gold has climbed past the $US2,000 ($2,758.65) an ounce mark again as investors flocked to the precious metals after the US dollar slipped to a two-year low.

The high gold prices in Australian dollar terms in the 2020 financial year have proven to be a boon for gold producers with Saracen Mineral Holdings (ASX:SAR) reporting a record net profit after tax of $189.7m.

This is up 105 per cent from the previous year and is due to a 50.7 per cent increase in gold sales to 528,693oz and a 23.9 per cent increase in the average price of gold to $2,138 an ounce.

Revenue was up 93 per cent to $1.07bn while gold production rose 47 per cent to 520,414 ounces.

And there is more growth ahead with the company expecting FY2021 production to range between 600,000 and 640,000oz of gold.

Northern Star Resources’ (ASX:NST) net profit also hit a record, coming in at $291m, up 67 per cent from the previous year, while underlying free cashflow rocketed 190 per cent to $423.1m on an average realised gold price of $2,208 an ounce.

Gold sales climbed from about 841,000 ounces in FY2019 to 900,000 ounces in FY2020.

Free cashflow is expected to increase further in the current financial year as spot prices are currently about $2,750 an ounce, more than $500 an ounce higher than in FY2020.

SAR and NST share price charts

Explorers are also having a field day

While gold producers at the bigger end of the market are busy counting the dollars, junior explorers have also been returning some notable results.

Musgrave Minerals (ASX:MGV) continues to confirm the high-grade nature of its Starlight gold discovery within the broader Cue project in Western Australia’s Murchison district.

The latest results include a top hit of 2m at 56.4 grams per tonne (g/t) gold from 74m within a broader zone of 8m at 17g/t gold from 74m and 12m at 19.5g/t gold from 3m.

Starlight remains open down plunge with diamond drilling continuing to test the depth extent of the lode below 250m.

Assays are also pending for drilling at White Light and on the Twilight and Velvet Lodes.

Meanwhile, Predictive Discovery (ASX:PDI) has successfully expanded gold mineralisation at its Bankan project in Guinea into fresh rock after a single diamond hole drilled below previous shallow gold hits intersected gold in multiple zones.

Top results include 21m at 1g/t gold from 41m, 23m at 2g/t gold from 86m and 23m at 2.4g/t gold from 116m.

Step-out drilling at NE Bankan has also intersected further zones of gold mineralisation including 26m at 21.9g/t gold from 58m.

MGV and PDI share price charts

Small-cap gold producer expands its footprint

Orminex (ASX:ONX) has executed a binding framework letter for the proposed acquisition of an epithermal gold asset in Indonesia from PT Amman Mineral Internasional (AMI).

The asset is just 60km from the world-class Batu Hijau copper-gold mine in Sumbawa that is operated by AMI.

Orminex holds a 51 per cent interest in the Comet Vale project in Western Australia’s Goldfields region, which produced 5,254 ounces of gold at a grade of 5.09g/t during the latest processing campaign.