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THE REAL COST OF GOLD PRODUCTION

[banx]

Breaking even is a lousy way to do business.

Producing at a loss is even worse.

Here's some interesting comments on real world cash costs for gold production.

Reference SGR--San Gold, a gold producer--these guys can never make money no matter how high the price of gold goes.

 

FROM BULLMARKETRUN.COM

 

What Are Companies’ Real All-In Cash Costs Of Gold Production?

 

Interesting comments from Frank Holmes at www.usfunds.com over the weekend…”George Topping and David Hove from Stifel Nicolaus dug deeper into the all-in cash costs measure suggested by the World Gold Council that would vastly understate the cost of Gold production at around $1,100…Realistically, the four senior Gold producers’ real total cost of production is closer to $1,800…We commented previously on Newmont’s Gold production decrease from 7.5 million ounces to 4.98 million ounces over 10 years despite spending $16 billion in capex…Topping noted the picture was not any better for Barrick Gold according to the report; over the last six years Barrick’s Gold production declined 15% to 7.3 million ounces, all this while spending $20 billion in capex…He is completely right in pointing out that if a company is not increasing production then all capital expenditures must be considered sustaining capital expenditures…We are in agreement that if you do not measure your costs, you will not get an improvement in your performance”…