Thursday, 17 April 2014

GFMS Gold Survey - April 2014 including Mine Cost Analyses

New Release, reviewed at Mineweb.....Get the full report below - Essential Reading

Little comfort for gold bulls in latest GFMS report

2013 data was interesting for increased mine supply despite falling gold prices, few mines have actually been shuttered, but a dramatic fall in scrap supply and increased Chinese demand keeping supplies under pressure but balanced by significant dishoarding from the ETFs, primarily GLD.
There is much more essential reading for anyone following gold and the miners.
Get the full copy and graphics simply registering - HERE

Cash cost curves, previously reported here, see prices at the margin have to fall below $1000 to significantly reduce mine supply, however all in costs show that new mines should not open without a price to offset all in sustaining costs over $1600. The impact of exceptional costs and write downs, which should be non-recurring, could be better presented here, and unfortunately the detailed graphic below does not really enlighten.

NOTE Extraordinary Cost impacts are $414 of overall industry AISC so average is $1200 if the industry hadn't taken wrong turns and built or acquired the wrong mines in the past.
Although without those high cost mines and wrong turns overall capacity and supply has to be much lower bringing that current focus on finding high grade high IRR projects at lower gold prices.

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