Hillgrove mine looks to the ground as gold price reaches sky-high records - ABC News

Hillgrove mine looks to the ground as gold price reaches sky-high records – ABC News

A regional New South Wales mine is heading south, as record gold commodity prices remain sky high. 

Key points:

Red River Resources’ Hillgrove site has officially announced it will begin underground drilling, said to begin by the end of this year.

The mine, located 30 kilometres outside of Armidale, is expected to open 100 job vacancies for the region.

Managing director Mel Palancian said it was good news for the New England community. 

“There’ll be 50 jobs going at Red River Resources, and 50 through sub-contractors,” Mr Palancian said.

“There are a lot of people who do fly-in-fly-out from Armidale, but there will also be opportunities for residential roles where they can go home every night to see their families.”

An aerial view of a mine

Hillgrove has had a bumpy history, having closed several times and more than 100 jobs lost in its last shutdown in December 2015.

Red River Resources took over the site three years ago, and since then has depleted existing gold stockpiles on its surface.

Two drilling sites will now search for underground ore which will produce gold as well as antimony and tungsten by-products.

Mr Palancian said he was quietly confident that Red River Resources worked differently than previous owners.

“We’re like any other mining companies, we’re price takers. So, if the gold or antimony price tanks, we can’t just waive our prices,” he said. 

“It’s really important we run an efficient operation.”

“It really comes down to what we can afford to drill.”

Main street of a regional Australian city

Gold prices propped up by pandemic

Senior commodities analyst for Minelife Gavin Wendt said he was not surprised by Australia’s recent obsession with the metal.

“It’s a relatively new rush,” he said.

shiny gold ingots stacked on top of each other

“Our gold production has always been strong. But since the high prices, we’ve seen many more mines recommissioned.”

Mr Wendt said the Armidale community had a right to be cautious about mine stability, considering previous job redundancies.

However, he expected Hillgrove’s future looked more stable than in previous years due to many factors.

“Previous owners have found problems with the processing side of gold production,” Mr Wendt said.

“In 2015 when Hillgrove went into care and maintenance, it coincided with a period of low prices which was sitting at $1,000 US per ounce. Now, it’s $1,800.

“That gives a company a significant buffer for operation costs when running a mine.”

Chart going on an increase

Mr Wendt also expected the high prices to stay near-record figures due to several attributing factors. 

“It’s escalated by the level of debt around the world, countries want something tangible to invest in,” he said. 

“The US dollar going down means gold usually goes up. Also, interest rates being low is usually a positive factor for gold.

“I don’t see any of that changing for the foreseeable future.”

This content was originally published here.

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