VC+ Exclusive | What is the Cost of Mining Gold?

WHAT IS THE VC+ COST OF MINING GOLD? AN ANALYSIS OF THE WORLD'S TOP 50 PRODUCING MINES There are over 3 BILLION OZ OF GOLD in the world's deposits The TOP 50 of these mines, alone contain over 1/3 of total gold: 33.5% or 1,006,486,918 oz ECONOMIC FEASIBILITY The TOP 50 gold mines are distributed geographically as follows: 6. 12 16 Europe Asia Australia South America North America Africa In which of these continents is the gold cost most economic? Here we take a look at the cash costs (per ounce) in each region: North America $59 $669 Europe $824 Asia S957 Afica South $710 America $715 Australia CLICK HERE TO CONTINUE READING NEVADA is home to 50% of the 12 mines in North America. The SOUTH AFRICA mines are the most expensive, primanily due to the fact that their underground mines are deep in the earth average cash cost of these mines is -$S80/oz The Cortez operation in Nevada has the LOWEST reported cash The Obuasi mine in Ghana is has the reported HIGHEST cash cost at $1519/or cost producing mine in the world at $282/ez ALL IN SUSTAINING CASH COSTS: BREAKING DOWN COSTS $919 $44 General admin costs CASH COSTS: Gold companies have historically reported the cost to mine as "CASH COST" per ounce, when reporting financials. $610 $561 Direct mining costs at market foreign exchange rates $156 $44 Mine development/ expenditures This method is not 100% accurate, and companies have just now started reporting an "ALL IN SUSTAINABLE CASH COST which provides a clearer look Royalties Banick Example (2013 0) (S29) ($14) ($50) By product credits $121 Other $26 Gains realized under currency hedge Sustaining Cap-ex Rehabilitation/ accretion and amortization $1 Mine on site exploration A LOW ALL IN CASH COST REPRESENTS ECONOMIES OF SCALE GOLD PRICE VS. MAJOR PRODUCERS' ALL IN COST $1.800 Gold producer profits are getting squeered from both directions lower geld prices and rapidly inflating costs. GOLD PRICE (Au) $1,600 $1.400 Goldcorp S1.200 $1135/0z JuommaN $1115/0z $1038/oz $1.000 Barrick $919/0z JAN 2013 FEB 2013 MAR 2013 APR 2013 MAY 2013 Cash costs per ounce are saill an excellent representation of the mine efficiency, but the all in cost has a MUCH BETTER reflection on th between the mines and head office. GOLD RESERVES WORLDWIDE Total contained ounces for producing mines Africa Contained ounces is the total amount of proven and probable ounces plus the measured and indicated and inferred ounces in each deposit. 28% North America 24% 432,573,970oz 317,019,950 oz Australia 19% 303,095,462 0z Asia 18% 277,651,350: South America 143.840.944 Europe 2% 28,084,000 HOW RARE IS GOLD? Even at these large gold mines you have to move a lot of dirt/rock to get ONE OUNCE of gold. The average grade of the top 50 producing by size and by grade is 5.3 g/t. To put this in perspective you have to move 9.39 TONS OF EARTH to get the weight of 1 golf ball worth of gold. 20,655 Ibs of dirt or 9 Volkswagen Beetles of dirt = 1 golf ball's weight of gold. This is why GRADE (how rich the ore) is important when evaluating gold deposits. WHAT IS THE FUTURE GOLD? OF MINING THE NEXT BIG PROJECTS Here we see each continent's next two LARGEST DEPOSITS and their contribution to current production levels (in %). NORTH AMERICA EUROPE COMBINED 90% Rosia Montana COMBINED Pebble Deposit 46 (Romania) 18,500,000 oz ASIA (Alaska, USA) 107,300,000 oz Rovina Valley (Romania) 6,960,000 oz Natalka |KSM Deposit (Russia) 58,950,000 oz (BC, Canada) 63,979,000 oz COMBINED 26% King King (Philippines) 11,943,000 oz Akyem (Ghana) 7,684,000 oz Pascua-Lama Deposit Kibali COMBINED (Chile) 25,810,000 oz (DAC) 10.920,000 oz 4% 40% Cerro Casale Deposit COMBINED 9% COMBINED Golpu (Papua New Guinea) 19,300,000 oz AFRICA Mt. Todd (Chile) 32,587,666 oz (Australia) 9,036,000 oz SOUTH AMERICA AUSTRALIA CATALYSTS ROVINA VALLEY AKYEM Pre-feasibility study EIS and PEA due PASCUA-LAMA NATALKA Construction update 02 2013 Solve Chilean 02 2013 Currently on hold environmental problems PEBBLE Feasibility study underway GOLPU Feasibility study complete Construction: 2014 ROSIA MONTANA Complete EIS and zoning KIBALI Production to start Expected: 2015 04: 2013 CERRO CASALE KING KING 04: 2013 Feasibility study complete For: 2013 EIS and DMPF feasibility study due MT. TODD Feasibility study due KSM EIS submitted 04: 2013 03: 2013 The Chilean CERRO CASALE mine, owned by Barrick / Kinross has the lowest expected cash cost of $277, a 20 vear ming life and a NPV of Drill Program: 2013 expected 02: 2013 $1,610,784,00 VC+ Learn about how Visual Capitalist is changing precious metals investing at: http://www.visualcapitalist.com/vc-plus CTICKERSCORES MARKET INTELLIGENCE EXCLUSIVES STOCK ALERTS WEEKLY TRENDS GET FIRST ACCESS TO OUR NEW PREMIUM PRECIOUS METAL CONTENT Apply to become a VC+ beta tester at visualcapitalist.com/vc-beta-tester-application VISUAL CAPITALIST