Is Gold Mining Sustainable At These Prices?

June 25th, 2013 by

This information was provided to Kitco News by a mining company that wished to remain anonymous. It shows a breakdown of its current costs and how mining an ounce of gold is costing them about 1,483/oz.

This information was provided to Kitco News by a mining company that wished to remain anonymous. It shows a breakdown of its current costs and how mining an ounce of gold is costing them about 1,483/oz.

Forbes has a feature article from Kitco News on how the pressures of sub-$1,300 gold are affecting mining companies, and what some of them are doing to survive.  A common tactic for the larger companies is to buy high quality shafts from distressed smaller companies (or buy the smaller company outright.)

Closing those mines that were profitable at $1500 an ounce but not at $1300 an ounce is not a decision to be taken lightly. There are large costs with stopping production and safely preparing the shaft to be mothballed. Pumps must continue to run and safety measures must be kept up.

Other cost cutting measures are cancelling exploration projects and plans for development of existing resources.