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Which Mining Companies Have the Lowest AISC?

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Sep. 23 2015, Updated 8:37 a.m. ET

Major miners’ costs

Adding AISC (all-in sustaining cash) costs to the companies’ annual reports was suggested by the WGC (World Gold Council) in 2013 to introduce more explicit production cost estimation across global gold miners. With the suggestions from the WGC, the most publicly traded companies have resorted to reporting the AISC costs in their annual reports.

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Polyus Gold was the lowest-cost gold producer in 2014. It saw its costs improve by 18% from the figures in 2013. The costs optimization has mainly been due to lower capital expenditures and the ruble devaluation compared to the US dollar.

Falling bullions

Despite companies’ best efforts and overall positive improvements in corporate AISC costs, the weighted average cash margin for the top ten gold producers didn’t keep up with falling gold prices in 2013 or 2014. In 2015, gold fell by ~7% on a YTD (year-to-date) basis. A similar performance is visible from silver. However, platinum and palladium had more losses than gold and silver. Platinum and palladium fell ~20% and ~26%, respectively, again on a YTD basis.

2014 top ten performers in regards to AISC costs

The 2014 figures pertain to the AISC costs. The figures give us the top ten performers with the lowest costs. Below is a list of the companies that have the lowest production costs. They’re listed from the lowest to the highest:

  1. Polyus Gold
  2. AngloGold Ashanti
  3. Gold Fields
  4. Newmont Mining
  5. Kinross Gold
  6. Newcrest Mining
  7. GoldCorp
  8. Sibanye Gold
  9. Barrick Gold
  10. Agnico Eagle Mines

The companies had falling cash margins. In regards to the weighted average cash margin for the top ten gold miners in 2014, the figures are 15% lower than the 2013 figures. The margins fell from $367 per ounce to $313 per ounce.

Mining companies like Sibanye Gold (SBGL), Kinross Gold (KGC), Gold Fields (GFI), and Agnico Eagle Mines (AEM) account for ~14% of the VanEck Vectors Gold Miners ETF (GDX).

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