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Comparing Gold Miners’ Unit Costs after Q1


Jun. 14 2019, Updated 4:28 p.m. ET

All-in sustaining costs and gold miners

AISC (all-in sustaining costs) is an encompassing measure that helps investors compare gold miners’ performances.

In the first quarter, Barrick Gold (GOLD) reported AISC of $825 per ounce, up 2.3% YoY (year-over-year). This increase in costs came despite the company’s higher volumes. Barrick expects its AISC to rise YoY to $870–$920 per ounce this year from $806 boosted by higher sustaining capex and the cessation of production at its high-grade, low-cost Cortez Hills open pit.

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Agnico Eagle Mines’ (AEM) AISC improved 6% YoY to $836 per ounce in the first quarter. It maintained its full-year guidance of $875–$925 per ounce.

Newmont Goldcorp’s (NEM) AISC for the first quarter was $845 per ounce, implying a fall of 4% compared to the same quarter last year. The lower costs were due to higher production, a lower stockpile and leach pad inventory adjustments, and a favorable Australian dollar foreign exchange rate. Newmont Mining maintained its 2019 AISC guidance at $935 per ounce.

Kinross Gold’s costs to worsen

Kinross Gold (KGC) achieved AISC of $925 per ounce in the first quarter, reflecting an increase of 9.3% YoY and an improvement of 3.7% sequentially. It has guided for AISC of $995 per ounce with a variance of 5% to either side for 2019. This figure is higher than the company’s AISC of $965 in 2018.

As we’ve seen, Barrick Gold’s unit costs have risen. However, it’s still among the lowest-cost producers of precious metals. For any given gold price (GLD), it could make the most money if other factors remain constant.


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