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In 2018, global gold mining companies’ average all-in sustaining costs (AISC) fell 6% across the board as miners reacted to a gold price in steady decline for most of the year.
The AISC metric serve as a benchmark of a mine’s operating efficiency. They provide a more comprehensive look at mine economics than the traditional “cash costs” approach that many companies may interpret arbitrarily – and it includes important expenses such as overhead outlays and capital used in ongoing exploration, mine development and production.
Mining Intelligence, a MINING.com sister company, looked at costs at primary gold mines and ranked them based on AISC. Primary gold operations are defined by Mining Intelligence as “mines where gold contributed to 80% or more of revenues from operating activities generated last year.”
The data used by Mining Intelligence represents companies reporting quarterly production and listed on the following stock exchanges: TSX (+TSX-V), ASX, LSE (+LSE-AIM), NYSE, and JSE. The ranking excludes privately-owned mines, tailings, re-processing operations, mines where the precious metal is produced as a by-product, and operations where companies report gold-equivalent output.
Falling out of the top ten list compiled by Mining Intelligence in 2018 are two Barrick mines that were on the Mining Intelligence list compiled in 2018: Lagunas Norte in Peru, where costs have gone up from $483 to $636/oz, and Pueblo Viejo, in the Dominican Republic, where costs rose from $525 to $623/oz. The Barrick mines made way for two recently commissioned mines: B2Gold’s Fekola mine in Mali, and Atlantic Gold’s Moose River mine in Nova Scotia.
Svetloye mine. Image from Polymetals.
Polymetal’s Svetloye mine is an open-pit gold operation that located in the far east region of Russia. Despite the remote location and lack of infrastructure, high-grade ores and heap-leaching technology help this mine to produce gold at the lowest costs possible.
Fosterville mine. Image from Kirkland Gold.
Fosterville is the largest gold producer in the state of Victoria, Australia. The underground mine is owned by Toronto-based Kirkland Lake Gold. Production in 2018 totalled 356,230 ounces. Recently the company raised the production guidance to 550,000-610,000 ounces for 2019-2020, up from the previous guidance of 390,000–430,000 ounces.
Olimpiada mine. Image from Polyus.
Located in one of Russia’s most prolific gold mining provinces, Olimpiada is Polyus’ largest operation.To treat Olimpiada’s sulphide ores, Polyus employs BIONORD, the company’s proprietary bio-oxidation technology. Successful exploration activities in the area indicate the potential for substantial extension of the life of this mine.
Voro mine. Image from Polymetal.
Voro is one of Polymetal’s very first key gold assets, acquired in 1998. The mine and processing facility is located in the Sverdlovsk region of Russia. The open-pit and heap leach operation started in 2000 and has another nine years of life.
South Arturo mine. Image from Premier Gold Mines.
The South Arturo open-pit gold mine in Nevada is a high-grade oxide deposit amenable for highly efficient heap leaching mineral processing and extraction technology. This deposit is of the prominent Carlin-type widely known as being one of the most productive and cost efficient geological formations worldwide. Premier Gold Mines holds a 40% interest in the South Arturo property with Barrick owning the remaining 60%. Barrick processes South Arturo ore at its Goldstrike plant 5 km south of the mine.
Long Canyon mine. Image from Newmont.
Newmont’s Long Canyon open-pit mine is of the same mineralization style as the South Arturo deposit, and the only significant discovery made in Nevada in the last decade. The nature of the deposit, application of a heap leach technology and tapping into existing infrastructure keep costs at Long Canyon at some of the lowest levels in the industry.
Fekola mine. Image from B2Gold.
B2Gold first acquired the world-class Fekola gold project in Mali through a merger with Papillon Resources back in 2014. First gold pour at the Fekola mine took place three years later. The company recently decided, based on a positive PEA study, to invest $50 million into expanding the mine’s capacity.
Goldcorp’s Cerro Negro mine.
Sitting 600 metres above sea level on the Patagonian plains in southern Argentina, Goldcorp’s Cerro Negro underground mine has 4.86 million ounces in proven and probable gold reserves. Commercial production began on January 1, 2015.
Blagodatnoye mine. Image from Polyus.
Polyus commissioned Blagodatnoye in Krasnoyarsk, eastern Siberia in July 2010. Processing capacity at the open pit, located 25 km from the Moscow-based company’s flagship Olimpiada mine, is 8.1 million tonnes of ore per year, which makes it one of the largest facilities of its kind in Russia.
Atlantic Gold’s Moose River mine.
Atlantic Gold’s Moose River open-pit mine is located in Nova Scotia that has a long history of gold mining. Commercial production was declared in March 2018, and in the first year production reached 90,500 ounces. Atlantic expects its phase two expansion plans will have gold production ramping up to more than 200,000 ounces per annum.
(Based on research compiled by Vladimir Basov of Mining Intelligence)
6 Comments
John Monhemius
Your research team seems to have overlooked Anglo Asian Mining plc, whose Gedabek gold-copper mine in Azerbaijan produced over 83,000 GEO (gold equivalent ounces) in 2018 at an AISC of $543 per oz. (H1, 2018), placing it at No.9 on your top ten.
Alastair McIntyre
There are very good projects on this list and interesting to see that low cost Canadian production barely fits into the top 10 with just one mine Touquoy (#10). This project is 65 km from Halifax where you can drive right to the gates via a provincial series highway, makes it one of the most accessible gold project on the planet and thus contributes to its low AISC.
Morgan Silver
Great point alastair. Nova Scotia has paved roads and power lines to all of its gold deposits as pretty much everyone in the province within Meguma was mined at one point or another. I suspect you will see several more of these come online for Atlantic gold and others very soon with very competitive AISC’s.
TJ
What about Newcrest’s Cadia Valley Operations in Australia? In FY18, CVO produced 600koz at an AISC of $171/oz …
Jonas Zetterman
You probably need to add K92 soons, from there Q1 2019 they are going to place there mine “Kora North deposit” at this list with “all-in sustaining costs (“AISC”) of US$533/gold oz or US$545/AuEq oz.”
https://finance.yahoo.com/news/k92-mining-releases-2019-q1-130500062.html
Bibistef
Sorry guys but there is a misleading information in the
article: AISC does not take into account exploration drilling. When you dig and
process an oz of gold, mining companies need to replace it by investing in
drilling, M&A or capital project to keep reserves steady or increase
it. Please do the correction.
On the other hand, Definition drilling is included in the AISC. Investing
in Gold mining companies is a crappy business, believe me.