Gold-mining costs are falling

By Iqra Mughal | 04 March 2017

During the three months to end-December 2016, most of the major gold-mining companies reported a reduction in all-in sustaining costs, or AISC, compared with the previous quarter. Supported by the implementation of asset restructuring and improvement initiatives throughout the year, the gold majors managed to reduce AISC on the basis of both a quarter-on-quarter and year-on-year analysis.

The top 19 publicly listed gold companies that reported AISC produced gold at a weighted-average cost of US$868/oz, slightly lower than the US$889/oz in the third quarter, according to data from the SNL Metals & Mining database, an offering of S&P Global Market Intelligence.

Centerra Gold, which reports AISC on a by-product basis per ounce sold, was the lowest-cost gold producer in the group with AISC of US$586/oz. According to Scott Perry, Centerra's CEO, the company's favorable cost performance during 2016 can be attributed to the higher mill production and lower unit costs at the company's flagship Kumtor mine, compared with the previous year.

In addition to Kumtor, Centerra's recently acquired Mount Milligan copper-gold project in British Columbia contributed 47,717 oz of gold and 4,700 tonnes of copper to the company's 2016 attributable production. Because of the acquisition, the company's gold reserves almost doubled to 16 Moz from 8.4 Moz a year ago, according to a Centerra press release in February. The reserves increase also incorporates upgraded measured and indicated open pit resources at the company's 50% owned Hardrock project in Ontario, based on a November 2016 feasibility study.

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