Key Insights into Major Gold Miners' Costs

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Part 8
Key Insights into Major Gold Miners' Costs PART 8 OF 11

Polyus Gold International: A Russian Mining Giant

Production rises marginally

Polyus Gold International is the largest gold producer in Russia. It ranks among the top ten gold miners. The company produced 1,696,000 ounces of gold in 2014. This is marginally high compared to 1,652,000 ounces in 2013. The production has risen for seven consecutive years. It has operational mines in the Ollmplada, Blagodatnoye, Vernlnskoye, and Tltlmukhta regions in Russia. The company saw gold production rise by close to 3% from 2013. However, the total costs have fallen nearly 17% since 2013.

Polyus Gold International: A Russian Mining Giant

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The above chart shows a downward trend in the costs for 2014. When comparing gold mining companies across the globe, it’s important to understand the mining costs for each company. Some factors impact these costs. The domestic currency rates, mine viability, depreciation, taxes, and site costs are a few factors that ultimately affect the AISC (all-in sustaining cash) costs for the miners. Standard & Poor’s confirms with a BB+ long-term corporate rating for Polyus, according to the annual report from 2014.

Russian miner: lowest cost

According to experts, Russia-based Polyus Gold International was most likely the lowest-cost gold producer in 2014. It had AISC costs of $825 per ounce. It was followed by Australia’s Newcrest Mining. It achieved roughly $854 per ounce. Next was Canada’s Barrick Gold (ABX) with AISC costs of $864 per ounce.

Other global miners

Other mining companies across the globe like the Royal Gold (RGLD), Eldorado Gold (EGO), Kinross Gold (KGC), and New Gold (NGD) have been affected in terms of the return due to the falling gold prices. Together, these four stocks account for ~14% of the price movements in the VanEck Vectors Gold Miners ETF (GDX).


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