Monsters of Rock: Chinese production cuts see iron ore dip as Gold Diggers thrive
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The Chinese Government may be quietly satisfied after sentiment around steel production cuts finally knocked down the iron ore price, hammering it 7% to a tick over US$180/t on Friday.
That led to a pretty bad day for the iron ore miners, with only BHP (ASX:BHP) marginally above water in late arvo trade.
More sensitive junior iron ore miners and explorers largely fluctuating from 5-20% drops.
Mid-cap gold producers were a bright spot though, and Diggers and Dealers keynote speaker Ian Goldin’s comments on gold remaining a key store of wealth will no doubt be music to the ears of them and the 2000-odd delegates at the famous Kalgoorlie mining forum.
Materials proved the sole drag on a share market basking in the afterglow of the massive Square-Afterpay takeover deal.
Ramelius Resources will increase gold production from its Mount Magnet and Edna May mining hubs by 27%.
It will produce 1.84Moz of gold across the next seven years, and still be processing low grade resources in 2029 and 2030 to bring its total mine life to nine years from its WA gold mines.
All that will take place at an average cost of $1390-1490/oz, providing more than $1000/oz AISC margins on current gold prices.
An expanded open pit at Edna May will be developed from FY24 and run for six years, while a new underground operation at the Galaxy pit will also be initiated during that time and the Vivien underground mine, which was due to run out of ore this year has been extended to the end of 2023.
The company plans to throw $32 million at exploration to grow its mine plan further. Ramelius MD Mark Zeptner presents at Diggers and Dealers on Wednesday.
St Barbara is leading its second turnaround mission in the past decade.
It turned the high grade Gwalia mine into one of the best gold mines in the world a few years ago, only to see costs rise sharply when it came to expand the operations.
It is renowned as one of the deepest trucking mines in the world, meaning the cost of expansion is always a risk.
The company’s new plan involves studying and developing a number of smaller open pits in the Leonora region. It may have shown its hand as well recently by taking up an almost 20% stake in nearby explorer Kin Mining (ASX:KIN).
St Barbs produced 328,000oz of gold at AISC of $1616/oz in FY21, and expects to deliver between 305,000 and 355,000oz in 2022 at $1710-$1860/oz.
High costs are anticipated at its Simberi operations in PNG but a reasonable performance of 65,000-85,000oz at $1305-$1,515/oz is expected at the Atlantic gold operations in North America.
The Hemi discovery has brought joy, not just for De Grey, but also for a catalogue of juniors benefitting from nearology plays around the 6.8Moz deposit.
De Grey revealed the maiden resource estimate in recent months, having used bullish sentiment for gold and other metals explorers to raise over $100 million for drilling last year.
Located within the broader 9Moz Mallina project, there remains plenty of scope for Hemi to grow. Recent hits from the Diucon prospect included a wide strike of 173.7m at 1.5g/t from 271.3m deep, about 80m below the current resource.