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Majority of largest gold miners booked higher all-in sustaining costs in Q1'20


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Majority of largest gold miners booked higher all-in sustaining costs in Q1'20

An analysis of 17 large global miners with reported quarterly figures showed the first-quarter all-in sustaining cost, or AISC, increasing quarter over quarter for 12 of the companies.

In the first quarter of 2020, the median AISC was US$975 per ounce, up 5.9% from US$923/oz in the previous quarter, for companies that reported attributable production of more than 500,000 ounces in 2019, according to an S&P Global Market Intelligence analysis.

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Among the group, Evolution Mining Ltd., Centerra Gold Inc. and B2Gold Corp. reported the lowest AISC in the first quarter, with all three companies booking quarter-over-quarter decreases exceeding 10.0%.

Evolution Mining's AISC dropped 10.7% to US$652/oz from US$731/oz, as operating costs remained flat and sustaining capital decreased. In its quarterly report, the Australia-based company said first-quarter gold production was slightly behind plan, dropping 3.2% quarter over quarter to 165,502 ounces, but that the decrease in AISC quarter to quarter was expected.

Centerra Gold's cost decreased 10.9% to US$712/oz in the first quarter of the year. The decrease in AISC was partly due to higher sales volumes from the Kumtor mine in Kyrgyzstan, according to the Canadian company's May 1 earnings release.

B2Gold, another Canada-based mining company, reported an AISC of US$721/oz for the first quarter, down 18.3% from US$882/oz in the previous quarter, which was the largest quarterly cost decrease in the group. Cash operating costs in the first quarter came in below the 2020 guidance range for the company's Masbate mine in the Philippines, the Fekola mine in Mali and the Otjikoto mine in Namibia.

The largest increase in AISC was recorded by Kirkland Lake Gold Ltd., jumping 51.6% to US$776/oz from US$512/oz in the prior quarter. The Canadian company partially attributed the cost increase to the acquisition of Detour Gold Corp. that closed in January. It also flagged lower sales, higher operating cash costs and sustaining capex at the Macassa mine in Ontario in the first quarter. Kirkland Lake Gold withdrew its 2020 production guidance in early April, due to the effects of COVID-19 at its operations, and withdrew its three-year production guidance in early May.

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Among the 17 largest gold producers, Sibanye-Stillwater Ltd. had the highest all-in sustaining cost for the quarter, at US$1,500/oz. The South African miner produced 238,076 ounces of gold in the first quarter of the year, a 20.8% drop from the previous quarter due to seasonal factors, operational disruptions and COVID-related lockdowns.

Newmont Corp., the miner with the highest quarterly attributable gold production at 1.5 million ounces, reported an AISC of US$1,030/oz, up 8.9% from the prior quarter. The U.S.-based company provided a revised 2020 outlook in mid-May, with gold production estimated at approximately 6.0 million ounces as operations ramp up at four mines that were on care and maintenance.