Gold in South Australia

South Australia accounts for more than a quarter of the country’s gold resources, but only 4 percent of gold production.

Australia is one of the world’s top gold miners, most recently producing 325.1 tonnes in 2019 and securing either second or third place for global production, depending on who you ask. From 2012 to today, the country has seen consistent increases in production year-on-year.

The most famous jurisdiction for mining output is Western Australia, which accounts for more than 60 percent of national output. The state of South Australia accounts for over a quarter of the country’s gold resources, but only 4 percent of production, according to South Australian government data.

The state is sitting on a lot of potential, with a major geological region — the Gawler Craton — identified by the government and mineral explorers as being of extreme interest for miners the world over. Indeed, it’s home to one of the premier mines of sector giant BHP (ASX:BHP,LSE:BHP,NYSE:BHP).

Taking up 440,000 square kilometres, the Gawler Craton covers roughly half of the state, with South Australia’s three producing gold projects all located in the region, including the Olympic Dam mine.

The outlook for the area to increase its share of raw gold production in the coming years is positive thanks to the exploration and development projects around existing mines and within the Gawler Craton. They are putting the as-yet-untapped quarter of Australian gold resources well within reach.

The state shares the geographical benefits of Western Australia in that it’s sparsely populated and covered with desert, making exploration somewhat easy to carry out.

Investing in South Australian projects is another relatively easy prospect — within Australia, which is itself an attractive and safe jurisdiction, the state comes second behind Western Australia in investment attractiveness, according to the Fraser Institute.

The three producing and active mines within the state are run as polymetallic projects, with all of them operating as copper-gold mines.

Top South Australian gold stocks by market cap

1. BHP

Market cap: AU$180 billion

The owner and operator of the world-famous Olympic Dam polymetallic mine is none other than global mining giant BHP. The company has operated the copper-uranium-silver-gold mine since 2005, though it’s been in operation since 1988.

While Olympic Dam is known primarily for its copper and uranium output, the mine represents almost half the gold output in South Australia, accounting for 146,000 ounces of gold, according to BHP’s most recent annual report.

2. OZ Minerals (ASX:OZL)

Market cap: AU$4.92 billion

OZ Minerals is another of the big players in South Australia, with two operating copper-gold mines and exploration tenements across the state. The company produced 122,763 ounces of gold from its Prominent Hill mine in 2019, and has a second mine, Carapateena, that is in the process of ramping up production following a successful construction phase in 2019.

Prominent Hill is itself ramping up further. It produced 51,629 ounces of gold in 2020’s third quarter, and the company has increased its gold production guidance through the year.

South Australia is the star jurisdiction for OZ Minerals, being home to two of its operational mines. It also has interests in Brazil, Peru and Sweden, though Australia remains the focus of its operations.

3. Terramin Australia (ASX:TZN)

Market cap: AU$114.29 million

Terramin Australia is a development company with assets in South Australia and Algeria. Within South Australia, it has interests inside the Gawler Craton and near the capital city of Adelaide, where it has 12 exploration tenements in the Adelaide Hills focused on gold.

The company’s flagship asset is the Bird-in-Hand project, which is a historical gold mine that Terramin estimates still holds 265,000 ounces of gold, despite being closed in the late 1800s.

Bird-in-Hand is one of multiple mines located within the Adelaide Hills that was a target for exploration in pre-Federation days in Australia.

The company is working on reopening the mine, which was originally shut due to technological shortfalls. According to the company, restart operations should cost around $25 million, and it is working through a staged approval process in order to get a mining lease.

4. Havilah Resources (ASX:HAV)

Market cap: AU$56.89 million

Havilah Resources is currently billed as an exploration company, with a raft of exploration and development projects dotted through Eastern South Australia against the border with New South Wales, where the nearest city and famed mining town of Broken Hill is located.

The company currently estimates its assets hold 3.2 million ounces of gold split between the Kalkaroo and Mutaroo projects — both located within South Australia outside of the Gawler Craton.

Kalkaroo, which is the company’s flagship project, sits on 3.1 million ounces of gold, according to its measured, indicated and inferred JORC mineral resources.

5. Rex Minerals (ASX:RXM)

Market cap: AU$50.79 million

Rex Minerals is an exploration and development company with assets in South Australia and Nevada, with its Australian interest being its Hillside copper-gold project on the Yorke Peninsula.

The Hillside project is a proposed mine, and was only discovered recently in 2008. In the most recent feasibility study for the project, the company envisages production of 24,000 ounces of gold annually for its first 12 years of production.

INNdepth

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Securities Disclosure: I, Scott Tibballs, currently hold no direct investment interest in any company mentioned in this article.

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Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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