iProperty Admin Gold is sitting at around US$1700 up and down $100 or so an ounce which with the AUS dollar at around US104 cents gives us a gold price around $1650. This seems to be a level at which most of our mines can operate profitably. The construction of Tropicana is well under way and there is still good exploration activity with exciting new deposits being discovered in our own back yard so this sector is very healthy.
Nickel is doing it tough at around US$17,000 a tonne but the major operators locally seem prepared to weather the weak price with an expectation of an improvement in time. I see in an article in the Kalgoorlie Miner recently that Poseidon Nickel are timing the reopening of the Windarra nickel mine to coincide with an anticipated tightening of supply and strengthening nickel price by 2014, encouraging for us!
The mining companies generally are looking closely at their costs and cutting non productive staff where possible. We have seen a bit of this in Kambalda resulting in a mini flood of break leases. On the other hand there is a strong move away from FIFO by companies like Mincor and Goldfields so the market remains reasonably firm in spite of the retrenchments. This opens up opportunities for Kambalda investors to upgrade and extend their investment properties to bring them up to modern standards and capitalise on the stronger rental market to generate better returns and help secure the longer term viability of their investment.
Iron Ore, not a product traditionally linked to the Goldfields, is performing strongly with the Yilgarn having several new companies looking to export their ore through Esperance. And for the first time we saw Brookfield Rail, in their presentation to the KBCCI What’s Down The Track forum in October, show a possible rail link from the Mid West to connect to the Leonora Kalgoorlie Esperance line and thence to the Esperance Port. This line could take ore from the Mid West deposits currently earmarked to go out through Oakajee as there seems to be a prevailing view that Oakajee will not get off the ground in the foreseeable future.
