Gold will be $10,000 one day – it’s a question of when, say these miners

• Gold miners think prices could continue to rise even after climbing above US$3700/oz this week
• Ora Banda and Pantoro are investing in organic growth to take advantage of gold’s bull run
• The sector has emerged as a bright spot for the Australian economy

Gold miners are the toast of the town over in WA, Australia’s mining heartland.

And they think a world of Trump, tariffs, rate cuts and inflation means the future could get even brighter.

“There’s a lot of optimism at the moment. I think that the world’s sort of accepted that there’s been a step change in the need for gold in an underwriting currencies and its place as a commodity,” Paul Cmrlec, the head of WA gold miner Pantoro (ASX:PNR) said on a WA Mining Club panel on Thursday. 

“Depending on how you look at how gold’s going to back those currencies, I think there’s crazy, crazy estimates of how high it could go out there.

“Certainly there’s a real undertone for major banks and industry analysts that are much smarter than me and know a lot more about the gold price than me that think there’s still a strong bit of growth to go in this cycle.”

Up around 40% this year to US$3700/oz (+A$5600/oz), miners are now confident gold is becoming increasingly accepted in financial markets as a go to store of wealth against Bitcoin and fiat currencies.

“It’ll get to $10,000, we just don’t know when, whether that’s one year or 50 years,” Ora Banda (ASX:OBM) MD Luke Creagh said.

Careful what you wish for

As gold prices rise so does inflation. And Creagh says it’s still important for gold miners to pick quality deposits and improve them to ensure costs don’t catch up with the gold price.

“From a business perspective you always trying to get costs out,” he said.

“But if you are seeing increased costs or you’re picking deposits that are higher cost acknowledge it and then have a plan if it does pull back. Don’t bank on everything going up forever.”

Now worth $2bn, Ora Banda was trading for pennies when Creagh became MD in 2022.

It’s now sitting on a 57% 12 month gain, as gold prices and record production from its long-cursed Davyhurst gold operations near Kalgoorlie have turned losses to profit.

After producing 92,400oz in FY25, OBM is planning to produce 140-155,000oz at an all in sustaining cost of $2800-2900/oz.

While M&A may be a hot topic right now, the company’s key strategy is around organic growth. Underfunded for years, it wasn’t until Creagh arrived that Davyhurst’s owners have adopted an underground production strategy.

After investing heavily already in drilling and feasibility work, they’ve got what a footy coach with a deep team may describe as a ‘nice problem to have’. The mines are now producing more ore than the company’s 1.2Mtpa processing plant can take, with the excess going to more expensive third party mills.

Studies are in the works into an expansion to 3Mtpa.

While that goes on, the focus is to drill and drill hard.

“We’re drilling like mad. We’re data poor,” Creagh said.

“We’ve taken an old belt that no one’s ever drilled for undergrounds.

“We’re putting $73 million, which is 330km, into the ground. We have to solve that. We’re finding gold at $50 an ounce.

“When you compare that, if you’re buying gold it’s at $5600-5700/oz. For us it’s very much an internal growth story.

“M&A is a value creation tool, a lot of people can get caught up with M&A.”

Growth outlook

The name of the game is now growth, with record gold prices generating cash flows that will help miners expand operations that have not seen capital investment in previous cycles.

The Norseman gold mine owned by Pantoro since 2019 was shut from 2014 to 2023, having previously operated unbroken for close to 80 years.

During its period in mothballs and later life in its first iteration, the site was blighted by safety incidents including three deaths in 2012, 2014 and 2016.

It’s now on an even keel, with Pantoro opening a new plant in 2023 and now able to properly chase growth in the multi-million ounce Norseman goldfield south of Kalgoorlie.

“It took a little longer to get there than we expected, but we’re in a sort of claimed 100,000ozpa runrate now and we’ve got a really big program in place to grow that up to 200,000ozpa over the next couple of years,” Cmrlec said.

“There’s lots of underground and open pit mining going on, but lots of drilling going on as well.”

While other areas of the Australian economy may be struggling, with job cuts at iron ore miners, consulting firms and banks leading headlines in recent weeks, gold producers are firmly in expansion mode.

Rob Ryan, the CEO of private mining contractor Mineral Mining Services, which has a JV with Black Cat Syndicate (ASX:BC8) and is looking to open its own open pit, said his business had gone from 50 employees to over 300 in around two years.

“It is a growing business, that does create excitement as well and does attract high quality people who want to come and work there,” he said.

At Stockhead, we tell it like it is. While Ora Banda is a Stockhead advertiser, it did not sponsor this article.