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SNL: Producers' Average AISC $833 Per Gold Ounce In First Quarter

(Kitco News) - Most gold-mining companies continued to reduce expenses in the first quarter, with the all-in sustaining cost per ounce for the top 17 publicly listed gold companies coming in at a weighted-average of $833 an ounce, according to a report from the mining consultancy SNL Metals & Mining.

“The major producers of gold gained an added advantage due to strengthening of the U.S. dollar against local currencies and lower global fuel prices,” said a report written by Iqra Mughal.

The lower costs came as gold prices rose in the first quarter, improving the profitability picture for producers.

Barrick Gold Corp. had the quarter's lowest AISC at $706 per ounce of gold produced, which was $130 less than the group’ median of $836 per ounce, SNL said. “Barrick primarily benefited from operating and capital-cost control initiatives, and from lower fuel prices and foreign-exchange gains,” Mughal said in the report.

Northern Star Resources Ltd. was next lowest with an AISC of $711 per ounce, SNL reported. This was a 5% decline from the previous quarter and a 30% drop from the year-ago quarter, mainly due to lower contracting, labor and supply rates that became effective Jan. 1, SNL said.

Newcrest Mining Ltd. achieved the third-lowest AISC at $723 per ounce, helped by high production at the Cadia Hill mine and a significant decrease in AISC at Hidden Valley, SNL reported.

Meanwhile, SNL reported that Iamgold Corp. reported the highest AISC compared with the 17 peers included in the study, at $1,084 per ounce of gold sold. “Although the company's March quarter AISC was 3% lower than the year-ago quarter, it was high compared with its peers due to an increase in sustaining capital and lower sales,” the report said.

Other companies at the higher end of the AISC spectrum were Centerra Gold Inc. and Gold Fields Ltd., with AISC of $1,015 per ounce and $961 per ounce, respectively, SNL reported.

Meanwhile, on the basis of first-quarter profit margin, Barrick Gold also led the pack with a margin of 40.2%, well above the group's weighted average of 29.8%, SNL said. Northern Star Resources Ltd. and Compania de Minas Buenaventura SAA were not far behind with margins of 39.9% and 39.1%, respectively.

Iamgold had the lowest profit margin of 8.8%, SNL reported. Centerra Gold and Acacia Mining Plc were also at the lower end of the spectrum with profit margins of 14.4% and 16.6%, respectively, SNL said.

By Allen Sykora of Kitco News; asykora@kitco.com

 

 

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