Hillgrove mine heads south as gold prices rocket sky high

This article was originally published on this site

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

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 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 mineAn aerial view of a mine
The Hillgrove Mine has had a bumpy history, with 100 workers losing their jobs in 2015.(Suppled: Red River Resources)

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.”

Main street of a regional Australian cityMain street of a regional Australian city
The Armidale community has been blindsided by job redundancies in the past.(ABC News: Brendan Esposito)

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 othershiny gold ingots stacked on top of each other
Gold prices hit $US2,000 an ounce on markets for the first time in August.(AFP: David Gray)

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.

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

Chart going on an increaseChart going on an increase
The $US price per pound of gold over the last 50 years.(Supplied: Gavin Wendt, goldprice.org)

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.