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SYDNEY, Sept 1 (Reuters) - Gold output in Australia, the world's no. 2 producer after China, rose 5 percent in the second quarter from a year ago as producers cut costs by increasing the ore grade.
Output was 67 tonnes for the three months ended June 30, 3 tonnes up from the same period a year ago and 3.5 tonnes above the preceding quarter, according the Gold Quarterly Review by Melbourne-based Surbiton Associates.
"The higher gold output in the June quarter was due to higher tonnages of ore treated plus slightly higher ore grades," said Surbiton Managing Director Sandra Close. "The increase in grade was precisely what we expected would happen following the price fall in early April."
Gold output fell 5 percent in the first quarter as wet weather impeded production in parts of Western Australia state, where roughly 80 percent of Australia's gold is mined.
Close said Evolution Mining's Mt Rawdon mine in Queensland was one of the best performing, almost doubling gold production. Output at St Barbara Mines's Gwalia operation in Western Australia was up around 60 percent.
Newcrest Mining's Australian operations also performed well, with output at Telfer in Western Australia up 30 percent and the combined output of its Cadia operations in New South Wales up 20 percent.
The Australian dollar gold price averaged A$1,570 per ounce in the March quarter 2013, but fell to average A$1,425 per ounce for the June quarter.
"Now the price has recovered to around the A$1,570 per ounce mark again," Close said. "If you factor in higher grades plus other cost savings measures that the industry has recently implemented, profit margins should improve."