You are using an older browser version. Please use a supported version for the best MSN experience.

Gold boom won't last, warns Evolution

AAP logoAAP 3/08/2016 Kim Christian

Major Australian gold producer Evolution Mining has sounded a warning to the booming gold sector: the party won't last forever.

Evolution chairman Jake Klein says his company has had a "huge" couple of years, building up a portfolio of seven operations after major global players left Australia following a slump in prices.

Now a 145 per cent surge in the gold miners index in 2016 had come, albeit from a low base, and made gold companies feel like "rock stars".

"At the moment the wind is behind our backs but at some point it will turn and when it does, we want to be able to prosper - even when it's blowing in our faces," Mr Klein told the Diggers and Dealers mining conference in Kalgoorlie on Tuesday.

Global uncertainty was continuing to support gold prices as central banks continued to be net purchasers of gold.

"Whichever way you look at it, the signs are very good for gold," Mr Klein said.

He cautioned gold company mergers and acquisitions should not be done on the hope that prices would go up.

"That would put you in a challenging space," he said.

"We went through a tough time from 2011 to late 2015 so the Australian gold sector has an opportunity to get back on the world stage and attract global investment."

With gold trading at around $1800 an ounce - up by a third since the start of 2016 - there was a risk that gold miners could lapse back into being "less rigorous" with costs, Mr Klein said.

He said high quality producers had good quality assets that operate at low costs, had one key cornerstone asset, a strong balance sheet and a strong company culture.

image beaconimage beaconimage beacon