Mining gold costs money
In the first quarter of 2021, the global average all-in sustaining cash cost (AISC) increased for the second consecutive quarter. To be precise, it cost around five percent more to get gold out of the ground in the first quarter of 2021 than in the previous quarter. For one ounce of gold, an average of US$1,048 has to be paid for extraction. This is the highest value since the second quarter of 2013.
The all-in sustaining cash costs represent the complete production costs incurred at a mine. They are calculated using three formulas so that the permanent production costs can be determined. Then they can also be related to the selling price of the precious metal. Three types of costs are included in the three formulas: cash costs, all-in costs, and the use of capital to develop and maintain the mine. Cash costs are the pure mining and processing costs, i.e., costs for labor, energy, fleet, and so on. All-in costs are primarily exploration costs. Mine development and maintenance costs are primarily costs to develop new deposits and costs to develop mining opportunities. If you add all three types of costs together, you get the all-in sustaining cash costs. In 2010, for example, these were already US$1,225 per mined ounce.
One producing gold company is OceanaGold - https://www.youtube.com/watch?v=Tc2cXMwrlfQ - with two operations in New Zealand (gold and silver). For 2021 to 2025, OceanaGold expects to produce 340,000 to 380,000 ounces of gold at AISC of $1,050 to $1,200 per ounce sold. AISC will thus be about 12 percent lower than in 2020, with falling costs and rising margins expected.
Endeavour Silver produced 1,073,724 ounces of silver and 11,166 ounces of gold from its three silver-gold mines in Mexico in the second quarter of 2021. All-in sustaining costs (AISC) were $19.94 per ounce of silver.
Current corporate information and press releases from OceanaGold ( https://www.resource-capital.ch/en/companies/oceanagold-corp/) and Endeavour Silver (https://www.resource-capital.ch/en/companies/endeavour-silver-corp/ ).
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