Australia"s gold production fell to 251 tonnes in the 2005-06 year, the lowest production for any financial year in the last decade according to Melbourne-based consultants Surbiton Associates Pty Ltd.

The company which has just released its latest quarterly report on the Australian gold mining industry says the full financial year gold production total was almost 15 tonnes or some 5% less than in 2004-05.

The lower production was due partly to a rain-affected March 2006 quarter and subdued production in the June quarter. Gold production in the June quarter totalled 61 tonnes, half a tonne more than the previous quarter.

"Australia's gold output barely rose in the June quarter despite the better weather," Surbiton Associates managing director Dr Sandra Close says.

"Production at several larger operations declined but this was offset by initial output from Barrick Gold's Cowal operation in NSW and better performances from AngloGold Ashanti's Sunrise Dam mine and Newcrest's Telfer operation."

Telfer produced 184,415 ounces in the June quarter displacing the Super Pit as Australia's largest gold mine. Output at the Super Pit, owned by Barrick Gold and Newmont Mining, fell 12,000 ounces to 164,000 ounces due to a 10-day maintenance shutdown.

Although overall gold output from established mines is little changed, several new companies and new operations are joining the list of producers.

"The higher gold price, with a local record of Aus$933 per ounce on 12 May, has encouraged some of the junior explorers to get into production as soon as possible," Dr Close says: "While some of the projects are only small, with the ore being sent for toll treatment, others are more substantial."

Dr Close says the smaller companies that are toll treating their ore are mostly located near Kalgoorlie in Western Australia. Those that have recently poured their first gold, or are about to do so, include Avoca Resources at Higginsville, Barra Resources at Burbanks, Kalgoorlie-Boulder Resources at Jackpot, Ramelius Resources at Wattle Dam and Reed Resources at Sand Queen.

In addition, Range Resources Ltd has poured the first gold at its Indee operation, as has Tanami Gold NL at Tanami, both of which are new operations.

Companies bringing old operations back into production include Gleneagle Gold at Fortnum, Renison Consolidated Mines at Tom's Gully and Haoma Mining at Bamboo Creek.

Among the larger operations, Bendigo Mining started production in mid-July and expects to produce 70,000 to 90,000 ounces in 2006-07. GBS Gold International is currently commissioning the Union Reefs plant in the Northern Territory, with an annualised production rate of 150,000 ounces in 2007 and 250,000 ounces in 2008.

"On the face of it, things look pretty buoyant but it is important to realise that many of these projects have developed from old exploration successes or from old mines," Dr Close says. "Completely new gold projects are thin on the ground, especially big ones."

Dr Close says that in Australia, despite increased exploration expenditure for many other commodities in the past few years, exploration expenditure for gold had barely changed in dollar terms since the downturn in the late 1990s.

While gold accounted for around 60% of mineral exploration expenditure in the late 1990s, this figure has now fallen to around 30%.

"It's ironic really, that ever since peak gold production in the late 1990s there has been less commitment to gold exploration in Australia, yet that is what is absolutely essential for the long term sustainability of the local industry," Dr Close says.

The top five operations for the 2005/06 year were: Super Pit-joint venture operated by Newmont Mining Corp 50%, Barrick Gold Corp 50% - 700,000 ounces; Telfer operated by Newcrest Mining - 650,016 ounces; Kanowna-Paddington operated by Barrick Gold Corp - 514,651 ounces; St Ives-Lefroy operated by Gold Fields - 496,408 Gold Fields Ltd; Granites operated by Newmont Mining Corp - 417,800 ounces.

Dr Sandra Close is the author of The Great Gold Renaissance - The Untold Story of the Modern Australian Gold Boom 1982-2002