Dr. Quinton Hennigh, CEO and Director of Novo Resources speaks on the profitability of gold mining in Australia.
The focus of Novo is to explore and develop high quality gold projects in Western Australia. We have two exceptional properties, Beatons Creek and Blue Spec. Beatons Creek is an advanced project that we’re moving towards development. We foresee building a modest size, but very high in margin gold mine. Blue Spec is very nearby. It’s a very high quality, high grade asset that we anticipate exploring through the cash flow from Beatons Creek.
It’s very important for people to understand that Beatons Creek is a very unusual project and that the mining is very simple. This is free digging and it’s very cost effective. Processing will also be very cost effective. Recovery rates on the gold should be high. So we’re looking at a project that albeit somewhat small in terms of production could be very high margin.
The Australian dollar has fallen over the past couple of years which has driven the Australian gold price to north of $1,600 per ounce. Fortunately, cost of operating and CapEx have not risen sharply in Australia. So that makes gold mining in Australia very, very profitable at the moment. Australia has been on the gold boom and we are going to be part of it.
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