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Gold miners upbeat in uncertain times

AAP logoAAP 1/08/2016

Australia's gold miners are upbeat about the year ahead as surging gold prices boost share prices and stimulate new projects thanks to weak global growth and uncertainty.

Lower costs, record prices and exploration and growth opportunities have lifted the mood among junior and mid-tier gold miners at this year's Diggers and Dealers Mining conference in the historic mining town of Kalgoorlie.

Doray Minerals managing director Alan Kelly said the past year had been "transformational" for his company which has gone from being a single gold mine producer to a two-mine operator.

"It's a great time to be an Australian gold producer with a record Australian gold price," Mr Kelly told the conference on Monday.

Gold producers have experienced a surge in prices amid global uncertainty, with the precious metal tipped to rise above this week's levels of $US1350 per ounce and $1778 per ounce.

Doray boasts Australia's newest high-grade gold project, Deflector, in Western Australia and plans to make a dent in its $90 million debt as it moves into production.

"Like a lot of our peers we've seen a pretty significant increase in our share price with some increased liquidity but there's still a little bit to go for us," Mr Kelly said.

Doray has increased its resource and had some recent exploration success.

The company is also seeing good interest from offshore investors.

But Doray remains "pretty undervalued" compared to its peers in Australia and Canada, Mr Kelly says.

Margins of $600 and above were "very achievable" in the current environment as the company experienced lower costs, particularly diesel.

Drilling prices for exploration were also still low, allowing the company to get more "bang for its buck".

Anglogold Ashanti senior vice-president Michael Erickson said lower costs and a weaker Australian dollar had added to the appeal of the Australian gold sector for overseas investors who had left in droves due to high costs.

"Now that the exchange rate's gone down it suddenly makes Australia not an expensive place to do business," he said.

Mr Erickson said the company had several opportunities which did not exist several years ago.

"There's definitely interest in looking to grow the portfolio," he said.

Meanwhile, Blackham Resources managing director Bryan Dixon said the company had an opportunity to finance its expansion plan and pay dividends following an increase in gold prices.

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