Gold in New South Wales

- November 25th, 2020

New South Wales is the second most prolific source of gold by production out of all Australia’s states, only coming behind Western Australia.

Despite its high population, industrial base and agricultural clout, the Australian state of New South Wales depends heavily on mineral exports, with commodities currently rounding out the top three sources of export income for the state.

While its largest mineral export is coal, the state has a long history with gold, being the home of the first Australian gold rush in the mid-1800s that helped kickstart the then-colony’s burgeoning economy. Gold found in Central New South Wales triggered an obsession with mining that burned for decades.

Though interest in gold has declined over the years, there are still 12 mines within the state that produce gold, with New South Wales accounting for some 16 percent of Australia’s economic demonstrated resources of gold. The state is also the second most prolific source of gold by production out of all Australian states, only coming behind Western Australia — though it’s a long way behind, producing 39 tonnes of the yellow metal in 2018 compared to Western Australia’s 211 tonnes in the same year.

 

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While New South Wales is ranked by the Fraser Institute as the least attractive Australian jurisdiction for investment attractiveness, the research firm puts it ahead of famed global gold-mining jurisdictions like Burkina Faso and Ecuador. On top of that, New South Wales is home to Cowal, one of the largest Australian gold mines outside of Western Australia. It is located right in the middle of where the gold rushes of old took place well over a century ago.

Notably, the state has the attention of both Australian and non-Australian operators, with Cowal having been up until recently owned by gold-mining giant Barrick Gold (TSX:ABX,NYSE:GOLD).

With Sydney being the home of the Australian Securities Exchange, New South Wales explorers, developers and operators that are listed on the premier Oceanic exchange don’t have to go far from site to stock exchange.

Read on to find out about the top five New South Wales-focused gold companies by market cap.

1. Newcrest Mining (ASX:NCM)

Market cap: AU$24.3 billion

The largest gold operator with assets in the state, Newcrest Mining is the owner of the Cadia operations in Central New South Wales.

The Cadia operations are huge, with the mine producing over 800,000 ounces of gold in the 2020 financial year, accounting for almost half of Newcrest’s global gold output. Newcrest also owns mines in Canada, Papua New Guinea and Western Australia.

2. Evolution Mining (ASX:EVN)

Market cap: AU$10.23 billion

Evolution Mining is the owner and operator of the Cowal gold mine, one of the largest gold mines in Australia. Located some 350 kilometers from Sydney, Cowal produced over 262,000 ounces of gold in the 2020 financial year, making it Evolution Mining’s largest asset, accounting for roughly a third of the company’s gold output from five producing mines in Australia and Canada.

An open-pit mine, the company has plans to open up underground development in the near future with hopes the mine will eventually crack 300,000 ounces per year.

 

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3. Alkane Resources (ASX:ALK)

Market cap: AU$610 million

Alkane Resources is the operator of the Tomingley gold mine in Central New South Wales.

Operations at the Tomingley site have shifted from open cut to underground in recent years since production began in 2014, with annual guidance of between 30,000 and 35,000 ounces of gold per year since it switched to underground in 2019.

Besides exploration works around Tomingley, the company has a number of other exploration projects on the go — mostly within New South Wales and mostly focused on gold.

4. Aurelia Metals (ASX:AMI)

Market cap: AU$441.36 million

Aurelia Metals acquired the Peak mine from Canadian company New Gold (TSX:NGD,NYSEAMERICAN:NGD) in 2018, with the mine producing almost 60,000 ounces of gold in the 2019 financial year. The Peak mine also produces not-insignificant quantities of base metals as a by-product, such as copper, lead and zinc. Located in a historical mining region and near population centres, the Peak mine is one of two gold mines operated by Aurelia.

Hera, the company’s other mine, is also in New South Wales. It is located near the town of Cobar, which is known for copper mining. Hera was purchased as an undeveloped project in 2009, and Aurelia has turned it into a 58,000 ounce per year operation in the time since. Hera also produces lead and zinc.

5. 3D Resources (ASX:DDD)

Market cap: AU$21.69 million

A much smaller company than the others included on this list, 3D Resources bought the historic Adelong mine in Southern New South Wales early in 2020 due to a rising gold price, with plans to drill and open a profitable operation in the near term.

Consisting of multiple gold projects, Adelong produced some 26 tonnes of gold over a 90 year lifespan, and according to 3D Resources is still ripe for development, with the Adelong tenements sitting on JORC resources of 180,600 ounces of gold.

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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