5 Top Australian Gold Stocks

The region of Australia

As previously mentioned, Australia is currently the second-largest gold-producing country across the globe.

Global gold consumption is expected to rise annually at a rate of 5.7 percent until 2023, when it’s expected to reach 4,535 tonnes. Australia’s continued expansion projects and new developments in the gold sector will improve output and help the country maintain its position as a key player in the gold production market.

One of the more prolific gold mining areas in Australia is Western Australia.

Recent exploration activity in the Pilbara region of Western Australia has renewed interest and helped increase the country’s consistent gold output. While the Pilbara region is typically known as one of the world’s largest producers of iron ore, the region is currently in the midst of a small gold rush thanks to a major discovery in 2017 by Novo Resources (TSXV:NVO,OTCQX:NSRPF) and Artemis Resources (ASX:ARV,OTCQB:ARTTF).

In fact, gold was the second largest commodity in Western Australia by value in 2020 to 2021, behind iron ore, at a record of AU$17.3 billion in sales in 2020. In 2021, the metal saw sales of AU$16 million in the state.

The Fraser Institute also named Western Australia one of the best mining jurisdictions in the world, coming in first in 2021. The area has attracted major miners like Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and BHP (ASX:BHP,NYSE:BHP,LSE:BLT) to the region. Covering more than half a million square kilometres (km), Western Australia’s Pilbara is one of the most resource-rich regions in the state.

Western Australia itself represents close to 60 percent of the country’s total gold output and some geologists have compared the geology of the Pilbara Craton with South Africa’s Kaapvaal Craton and Witwatersrand Basin. Witwatersrand is home to the Earth’s largest known gold reserves and is responsible for over 40 percent of worldwide gold production. Both the Pilbara and Witwatersrand are similar in age and composition, sitting on top of the Archean granite-greenstone basement. The Pilbara area hosts numerous small mesothermal gold deposits containing conglomerate gold — mineralization known to hold large, high-grade gold nuggets.

What are the top Australian gold mines?

Below is a guided tour of the top 10 largest gold mines in Australia in terms of gold output, according to the Aurum Analytics quarterly report on Australian and New Zealand gold operations.

1. Cadia Valley

Owned and operated by Newcrest (ASX:NCM,OTC Pink:NCMGF), Cadia is officially the biggest mine in Australia in terms of production. During the second quarter of 2021, the asset had an output of 194,757 ounces of gold.

The mine is made up of the Cadia East underground panel cave mine and the Ridgeway underground mine (currently in care and maintenance), which produce gold doré bars from a gravity circuit and gold-rich copper concentrates from a flotation circuit.

In October of 2019, the company announced approval of the Cadia expansion project, bringing it to the execution phase. This stage involves beginning development for the next cave (PC2-3). In December 2021, the company received approval to expand production to 35 million tonnes a year.

2. Boddington

Newmont (TSX:NGT,NYSE:NEM) became the sole owner of this open-pit mine in 2009.

The mine is located 16 kilometres from Boddington, Australia, and has an annual gold production of 709,000 attributable ounces. The mine is Western Australia’s biggest gold producer. In 2020, the asset produced 670,000 ounces of the yellow metal.

In addition to gold, the mine also produces copper, and at the end of 2020, it provided an output of 56 million attributable pounds of the base metal.

In 2021, the company announced that Boddington would have the industry’s first autonomous haulage fleet.

3. Fosterville

Fosterville is a high-grade, low-cost underground gold mine located in the state of Victoria, Australia. The Fosterville mine features growing gold production at increasingly high grades, as well as extensive in-mine and district scale exploration potential.

The mine has been operational since 1989, with a lifetime production of over 16 million ounces of gold. Additionally, in terms of scale, it is Australia’s largest mine and its pits encompass more than 5 square kilometres. It’s also one of the lowest cost gold mines in the world.

The asset, which is owned by Agnico Eagle Mines (TSX:AEM,NYSE:AEM), is the third-largest gold-producing mine in Australia, producing an impressive 157,993 ounces in Q2 2021.

4. KCGM

Northern Star (ASX:NST,OTC Pink:NESRF) owns Kalgoorlie Consolidated Gold Mines (KCGM), which includes the Fimiston open pit, Mt Charlotte underground mine and Fimiston and Gidji processing plants.

Northern Star refers to the Fimiston open pit as a super pit because it has produced more than 50 million ounces of gold in the last 30 years.

The asset is located in the legendary Golden Mile, which was once reputed to be the richest square mile on earth. When fully developed, Kalgoorlie will be 3.6 kilometres long, 1.6 kilometres wide and up to 650 metres deep.

KCGM Operations had previously been joint-owned by Barrick Gold (TSX:ABX) and Newmont until both companies sold their interests, and the operations were handed entirely to Northern Star in June 2021.

5. Telfer

Another mine owned by Newcrest, Telfer is located in the eastern Pilbara and is one of the oldest in Australia. Between the years 1975 and 2000, the asset produced approximately 6 million ounces of gold until operations were suspended due to high operating costs.

Fortunately, production was able to restart in 2004, and the mine has since produced over 5 million ounces, with 416,000 ounces of gold in the 2021 financial year alone. The mine also produces copper, with an output of 16 tonnes in 2019.

In 2015, the company signed a land use agreement with the Martu people, which enabled work at the mine to continue in exchange for the Martu receiving AU$18 million over the course of five years with the addition of a further revenue-sharing agreement.

6. Tanami

Tanami has been fully owned and operated by Newmont since 2002, and it is located in the remote Tanami Desert of Australia. Additionally, both the mine and the plant are located on Aboriginal freehold land that is owned by the Warlpiri people and managed on their behalf by the Central Desert Aboriginal Lands Trust.

Tanami is a fly-in, fly-out operation in one of Australia’s most remote locations. The asset is 270 kilometres away from its closest neighbours, the remote Aboriginal community of Yuendumu. In 2020, Tanami produced 495,000 ounces of gold and reported 5.9 million ounces of gold reserves.

The Tanami Expansion 2 is currently underway to secure its future, potentially extending the mine life to 2040 and increasing annual gold production by an approximate 150 to 200 thousand ounces.

7. St. Ives

Owned and operated by Gold Fields (NYSE:GFI,JSE:GFI), St. Ives is both an open pit and underground mine, with two main open pits, and three underground mines.

In one of Gold Fields’ latest quarterly reports, it was revealed that St. Ives produced 393 tonnes of the yellow metal in 2021, up 2 percent from 385 tonnes in 2020.

8. Tropicana

Tropicana is co-owned by AngloGold Ashanti (ASX:AGG,NYSE:AU,OTC Pink:AULGF), which owns 70 percent, and Regis Resources (ASX:RRL), which owns the remaining 30 percent.

The mine spans 3,600 square kilometres, stretching over close to 160 kilometres in strike length along the Yilgarn Craton and Fraser Range mobile belt collision zone. The regional geology is dominated by granitoid rocks; it is a rare example of a large gold deposit within high grade metamorphic rocks that have undergone widespread recrystallisation and melting.

In 2021, Tropicana produced 265,000 ounces of gold with an all-in sustaining cost of AU$1,326 per ounce.

9. Jundee

Jundee is located in the increasingly sought-after Western Australia region and is owned by Northern Star after the miner purchased it from Newmont in 2014 for AU$82.5 million.

The project is well-known due to the fact that it solely uses underground mining and not the often utilized open pit mining. Jundee produces around 1.8 million tonnes of ore per year.

Most recently, the asset produced 83,562 ounces of gold in Q2 2021.

10. South Kalgoorlie Operations

The South Kalgoorlie Operations were acquired by Northern Star (ASX:NST,OTC Pink:NESRF) in 2018.

In the second quarter of 2021, the South Kalgoorlie Oerations produced 76,175 ounces of the precious metal.

How can you invest in Australian gold stocks?

Like all publicly listed stocks, gold companies issue shares that are available for investors to trade. When you purchase shares of a gold stock, you are essentially purchasing a stake in the company, making an investment with financial returns or losses from its profits.

There are two main ways that an investor can invest in gold mining stocks. The first way is when market participants purchase through a major mining company; the other way of trading on the stock market is by investing in a gold mining stock through a junior miner (a small cap stock).

Although no gold stock investing is 100 percent foolproof, backing a successful mining company in the precious metals space can alleviate some of the stress of a down stock market when you keep in mind that if a company’s share price goes down, it becomes more affordable to purchase and investors can more than likely anticipate that it will rise again and turn a profit.

While gold stocks are affected by some of the same factors that shape and shift the price of precious metals, they keep some distance from a direct correlation because it is possible for a gold miner and its stocks to be in a sound financial situation, even in a down market.