Gold Down Under: Gold Mining in Australia

A historically important industry for the country, gold mining in Australia continues to boom.

Gold prospecting and mining helped to build Australia into the nation it is today, and, nearly two centuries later, gold mining in Australia continues to be a vital industry for the country.

Ever since the first discoveries of gold in the 19th century, gold mining has been a key contributor to the Australian economy, and the land down under has been integral to the global gold industry. As one of the world’s top gold-producing countries and one of the top-ranked mining jurisdictions, Australia has been attracting some of the industry’s premier mining companies for decades with no sign of slowing down. The geographically fortunate country boasts the largest gold reserves on Earth, easily extractable material due to natural weathering and a supportive yet responsible regulatory climate, all resulting in strong potential and high margins for the country’s mining industry.

Some of the oldest mineral formations on Earth are located on the continent of Australia, making for a vast richness of mineral deposits including iron, uranium, cobalt, nickel, copper, zinc, platinum, diamonds and, of course, gold. Australia currently hosts 66 active gold mines including 14 of the largest on Earth. Of those gold deposits, the vast majority are located in Western Australia.

Australia’s golden history

The very first confirmed gold find in Australia occurred in 1823 with the discovery of riverbed gold particles in the Bathurst region of New South Wales. The next 27 years would see the odd small discovery, mostly in New South Wales and Victoria. In 1851, a prospector named Edward Hargraves, who had just come to Australia with new prospecting methods from the California gold rush, made the discovery that kicked off the first Australian gold rush. Hargraves’ discovery was near Orange, New South Wales, but the discovery, along with the introduction of the panning and cradling methods, brought prospectors from all over the world to any part of the country that had seen so much as a hint of gold discovery in the years prior.

The resulting influx of immigration transformed Australia into the country we know today. Major discoveries in Western Australia sparked another major gold rush in the late 1890s, bringing a wave of prospectors to the region and resulting in the beginning of some of the country’s major mines, one of which, the Super Pit in Kalgoorlie, is still operating today.

Australia as a premier mining jurisdiction

This mining heritage and the understanding that mining helped build the Australian economy into what it is today informs government support for the industry. The Australian federal government and the state governments understand that their economic prosperity relies on the success of mining and exploration. Australian states have industry-friendly but responsible regulatory systems and supportive infrastructure to help ensure a smooth regulatory process with a predictable outcome. As the second-largest producer of gold in the world behind only China, Australia extracted 301 tonnes in 2017, up 3 tonnes from the year before, for its highest production since 1999.

A significant part of the appeal of Australia as a premier mining jurisdiction comes from low production costs and high margins. Not only does Australia have some of the world’s largest gold deposits, but the age of these deposits combined with extensive weathering means that many of these are near surface. This allows for easy, low-cost extraction. However, it isn’t only geological factors lowering gold exploration and production costs. The Australian dollar is weak compared to the US dollar, allowing miners operating in Australia to increase margins by selling gold in US dollars.

Gold mining in Australia: Companies and projects

The largest gold-mining company in Australia by market cap is Newcrest Mining (ASX:NCM). Newcrest has been operating in Australia since 1975 with the discovery of the Telfer open-pit mine in Western Australia, which continues to produce today. Newcrest’s Cadia Valley operations produced 599,717 ounces of gold during the financial year ended June 20, 2018.

Northern Star Resources (ASX:NST,OTC Pink:NESRF) became Australia’s second-largest gold miner in 2005 when it first began operations at the low-cost Paulsens gold mine in Western Australia. Since then, the company has expanded its assets in Western Australia with the acquisition of the Kanowna Belle mine and a 51 percent stake in the East Kundana mine.

Evolution Mining (ASX:EVN,OTC Pink:CAHPF) owns five Australian gold operations in three states, while AngloGold Ashanti (ASX:AGG,NYSE:AU) owns two facilities in Western Australia, the Sunrise Dam and the Tropicana mine. The northeastern goldfields of Western Australia produced 559,000 ounces of gold in 2017.

Throughout 2018, Canadian junior gold miner NxGold (TSXV:NXN) conducted exploration on its promising Mount Roe gold project in Western Australia’s Pilbara region, an area known as one of the world’s largest iron-ore-mining regions. According to the company’s January 2019 exploration update, recent sampling has returned a high of 4.8 g/t gold. The area in which the Mount Roe gold project is located has the potential to host a range of gold systems. The flattened, rounded gold nuggets recovered at Mount Roe suggest that the property contains similar gold geography to that of adjacent Novo Resources (TSXV:NVO,OTCQX:NSRPF), Artemis Resources (ASX:ARV,OTCQB:ARTTF) and De Grey Mining (ASX:DEG,OTC Pink:DGMLF) properties.

Macarthur Minerals (TSXV:MMS,OTCQB:MMSDF) is another junior miner in Australia and owns 18 exploration licenses in Western Australia accounting for 325 square kilometers in the Pilbara region. These properties were originally acquired with lithium in mind, but as gold exploration in the region has heated up, Macarthur has recognized the properties’ potential for gold production. Junior miner Pacton Gold (TSXV:PAC;OTC Pink:PACXF) controls one of the largest land packages in the Pilbara region.

Takeaway

From the first discoveries of the 1850s gold rush to the modern boom that we’re seeing in Western Australia, gold mining continues to provide enormous opportunity for low costs and high rewards for miners of all sizes and for the economic benefit of the nation.

This INNSpired article is sponsored by NxGold (TSXV:NXN). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by NxGold, in order to help investors learn more about the company. NxGold is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with NxGold and seek advice from a qualified investment advisor.

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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.

Queensland is the 16th most attractive jurisdiction in the world, sneaking in above BC and the Yukon in Canada, and just behind New Mexico in the US.

Queensland is one of the top three Australian jurisdictions for copper.

While it's well behind South Australia, a behemoth in the country for resources and production, Queensland hosts some 12 percent of all known Australian copper deposits, level with its southern neighbour New South Wales.

A premier mining jurisdiction globally, Queensland is ranked third out of all Australian jurisdictions for mining investment attractiveness, according to the Fraser Institute. Globally, it's ranked as the 16th most attractive jurisdiction, sneaking in above BC and the Yukon in Canada, and just behind New Mexico in the US.


The state is renowned for its mining prowess in Australia, and is known as one of the resource states, with a large chunk of its economic heft coming from the mining industry and its operations across the vast state.

Overall, mining accounts for 11.7 percent of Queensland's economy, with coal and liquefied natural gas being the primary focus of output. Together, coal, gas and mineral exports account for over 80 percent of Queensland's exports, according to the state government.

Having said that, copper plays a large role, and Queensland is home to the second biggest producer of copper in Australia in the form of Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa mining complex in the northwest of the state. There, Glencore owns and operates the Enterprise and X41 mines.

Aside from Mount Isa, Glencore owns the nearby Ernest Henry copper mine. Combined, Glencore's Queensland operations produced 138,800 tonnes of copper in 2020 — accounting for a little over 10 percent of the company's global copper production. Glencore isn't listed on the ASX, but can be found on the LSE.

Besides the Mount Isa complex itself, there's also a handful of other operational mines in the northwestern portion of the state, although most of them are privately owned, such as the Capricorn copper project, which is a joint venture between EMR Capital and Lighthouse Minerals; it secured itself "prescribed project" status in 2017.

Other privately owned projects include Round Oak's Barbara project (in care and maintenance), Chinese-backed CuDECO's Rockland copper project (mothballed, CuDECO in liquidation) and Chinova's Osborne mine — which was originally set up by Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF). There's also the Balcooma mine, which Royal Gold (NASDAQ:RGLD) has copper royalties on, and the privately owned Mount Cuthbert mine.

Many of the mentioned projects ran into trouble in 2020, with the COVID-19 pandemic limiting company operations.

All in all, Queensland has 13 operational copper mines, but as can be seen many are in private hands, making investment opportunities somewhat slim. Aside from previously mentioned Glencore operations, there's Red River Resources (ASX:RVR,OTC Pink:RRRDF), which owns the Thalanga operations near Charters Towers. Red River acquired Thalanga in 2014, and has been working to develop the legacy site back into a viable investment.

From the beginning of production in 2017, the operations have a lifespan of some 10 years, according to Red River, with further development and exploration options on the table. In its most recent quarterly report, Thalanga reported output of 3,086 tonnes of copper concentrate.

The remainder of the options on the table for investors are exploration focused, such as Copper Mountain Mining (ASX:C6C,OTC Pink:CPPMF) with interests in the Eva copper project, which is — unsurprisingly — in the northwest of the state, near the town of Cloncurry. Eva is in the development phase, with a feasibility study completed in early 2020 envisaging a 15 year mine life with an annual expected output of 106 million pounds of copper equivalent.

There's also Global Energy Metals (TSXV:GEMC,OTCQB:GBLEF), which like Glencore isn't on the ASX, but has interests in the Millenium cobalt-copper-gold project and others near Mount Isa — all in the exploration stage.

Aside from that, Strategic Energy Resources (ASX:SER) acquired exploration licences from Newcrest Mining (ASX:NCM,OTC Pink:NCMGF) in May 2021 for licences around Mount Isa, and Zenith Minerals (ASX:ZNC) is exploring the Develin Creek copper-zinc project. Zenith recently divested from another copper project, Flannagans, in June 2021 by selling its interests to a private company for $450,000.

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

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

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