For the first nine months of 2007, China’s gold
production totalled 191.5 tonnes, which was just behind South Africa’s declining total of 192.7t, and could overhaul the latter in the
final quarter of the year.

Dr Sandra Close of Melbourne-based
Surbiton Associates, said that Australia eclipsed United
States production with 184.5t
for the nine months compared with the US estimate of
179t.

For the September quarter Australia produced 61.7t (2 million ounces) of gold which was about 1t (330,000 oz) less than the June quarter, but was relatively similar to the
September 2006 quarter output.

Dr Close said Australia’s quarterly gold output has remained relatively stable for the last
two years.

“The Australian gold price reached an
all time closing high of $A939 per ounce on November 26 ($US826.32/oz today)
and was even higher during the day,” said Dr Close. “This occurred due to a combination of a
higher $US gold price and a lower Australian dollar exchange rate.”

Dr Close said the higher local gold
prices were obviously encouraging. However, she pointed out that, even if they
are sustained, they may have little effect on production levels as producers
could well prefer to extend the life of mines by mining slightly lower grade
ore.

“In the longer term, there is no
substitute for exploration,” Dr Close said.

“Each year around 250t (about 8 M oz), worth over $A7 billion, are mined in Australia and an equivalent amount of gold must be discovered annually just to
maintain reserves.”

Several new operations came on stream
while others closed or are suspending production.

“In the September quarter Telfer
claimed the spot as top producer, with Super Pit and Sunrise Dam (also in Western Australia) close behind,” Dr Close said. “Together, these three operations
accounted for almost one quarter of all the gold produced.”

Operations that recently joined the
list of producers include Meekatharra (Mercator Gold plc), Davyhurst (Monarch
Gold Mining Co Ltd) and Bronzewing (View Resources Ltd), while Wattle Dam
(Ramelius Resources Ltd) and Laverton (Crescent Gold Ltd) were ramping up
production.

Thunderbox (now owned by MMC Norilsk
Nickel) closed in November due to lack of reserves. “As well, Wiluna (now owned
by Apex Minerals NL) has been placed on care and maintenance and the Hill 50
mine at Mount Magnet (being sold to Monarch Gold) is expected to suspend
operations early in 2008,” she said.

Thunderbox, Wiluna and Hill 50 have
all been steady producers for a number of years, with a total quarterly output
of around 3t.

“Fortunately, Australian gold output
should benefit from a number of new and recycled projects coming into
production in 2008 and 2009,” Dr Close said.
“These include Boddington (Newmont/AngloGold), Gwalia (St Barbara),
Higginsville (Avoca) and Prominent Hill (Oxiana) plus the continued build up
from those operations that have recently commenced production.”

The top five Australian operations for the September
quarter 2007 were:

Operation

Ounces

Owner

Telfer

159,634

Newcrest

Super Pit – JV

154,000

Newmont 50%, Barrick Gold 50%

Sunrise Dam

153,230

AngloGold Ashanti

St Ives/Lefroy

102,400

Gold Fields

Tanami, Northern
Territory

102,000

Newmont