AUSTRALIAN gold production is set to plummet to its lowest level in 20 years according to a leading mining consultant. In its latest review of gold mining activity, Surbiton Consultants found that gold output reached only 56 tonnes in the September quarter. The result is the third lowest quarterly figure in the last 20 years and more than five tonnes or nine per cent lower than for the September quarter last year. "It looks as though Australia's gold production for the full 2008 year will be the lowest since 1989," said Surbiton director Dr Sandra Close. "It will be somewhere between 25 to 30 per cent lower than the peak year of 1997." Despite falling output, the value of gold produced has risen this year. The average Australian dollar gold price for the September quarter was near A$1000 per ounce. But the strong price has not been able to keep some miners viable. Dr Close said that several companies which had sought to redevelop older operations had found the going tough. "The low cost producers are making excellent profits but those at the high end of the cost curve are battling," she said. In September, GBS Gold Australia, which operated Union Reefs, south of Darwin went into administration and early in October, Mercator Gold, at Meekatharra, suffered a similar fate. "The same had happened earlier this year to View Resources at Bronzewing and Monarch Gold Mining at Davyhurst," Dr Close said. Dr Close said there were positive signs in the industry despite slowing activity. She pointed to a recent expansion by Avoca Resources as a filip for the sector. Avoca poured its first gold from the project in early July and produced almost 22,000 ounces in the September quarter.

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