The New Gold Rush: Why Australia’s Miners Say This Time Is Different

Gold Industry Overview - Australia produces approximately 300 tons of gold annually, representing about 8% of global production [1][14] - Gold price has increased nearly tenfold since 2000 and more than doubled in the last 5 years [1] - The gold price was around $150 per ounce 40 years ago, and now it's over $5,000 per ounce [1] Company Performance and Investment - Northern Star spends approximately $300 million to $400 million per year moving material to access over 6 million ounces of gold [1] - Evolution Mining's adjusted gross profit jumped from approximately $270 million USD (about $410 million AUD) to $1 billion and is expected to grow to almost $2 billion next year [1] - Evolution Mining invested $250 million in plant expansion and $75 million to open a new mining center, increasing plant capacity from 2 million tons to 42 million tons [1] Market Dynamics and Investor Sentiment - Central banks' shift towards holding more gold in reserves is driving the current gold price increase, differing from the previous cycle driven by economic factors [1] - Investors are showing increased interest in Australian gold stocks, particularly in the U S market [11] - Since the start of 2022, the gold price is up 85%, and Australia's gold miners are up 98% [10] Capital Management and Strategy - Gold companies are focusing on capital management measures such as paying dividends, doing share buybacks, and compressing registers [6][7] - Investors prefer tuck-in or bolt-on acquisitions close to existing infrastructure [7] - Gold miners are opting for a no-hedging policy to maintain exposure to spot prices, using put options to protect against downside risk [9]