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MrBlonde

The Cost Of Gold Mining

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I found an interesting article some of you may find interesting. It talks about the cost of gold mining. It says most gold mines are paying on average $1000 dollars to mine an ounce of gold. If true, this basically means the price cannot go too much lower or mining companies will have to close down creating shorter supply.

http://goldnews.bullionvault.com/gold-mining-062820123

On another note, I also heard from a mate who knows a gold miner in Australia. He basically said that the mine costs per ounce range from $600-$1200. It varies on which area of the mine is dug. Some sections produce more gold than others. So if the gold price is too cheap then they would just stop mining the expensive side of the mine

Your thoughts?

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I was reading something from SBG securities the other day along the same lines about South Africa. With unit labour costs rising ~12% p.a. they project a price requirement of $2000 by 2015 for the South African miners to stay in business, assuming the rand doesn't appreciate much against the dollar. Of course, any significant downturn in physical production will drive gold prices up sharply. Worth bearing in mind if you've sold some in the past week.

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I found an interesting article some of you may find interesting. It talks about the cost of gold mining. It says most gold mines are paying on average $1000 dollars to mine an ounce of gold. If true, this basically means the price cannot go too much lower or mining companies will have to close down creating shorter supply.

http://goldnews.bull...ining-062820123

On another note, I also heard from a mate who knows a gold miner in Australia. He basically said that the mine costs per ounce range from $600-$1200. It varies on which area of the mine is dug. Some sections produce more gold than others. So if the gold price is too cheap then they would just stop mining the expensive side of the mine

Your thoughts?

The cost of mining and refining metals has been increasing decade upon decade. Unsurprisingly, the easy to access and best grade ores have been mined first, and the stuff we're left with is increasingly more costly to mine and refine. This is true for all metals, including vital ones like iron and copper. In fact it's true of any kind of mining; Scotland's biggest open cast coal miner Ath Resources went into administration last year, citing the persistently high cost of diesel as a major factor (over 40% of their costs).

However, as was pointed out on another thread, most of the gold that comes onto the market is from scrap rather than new supply, so miners cutting production would be cushioned for a long while. And for the short term at least, miners may lose money more slowly keeping them open, but in the long term they'd have to close them if the price stayed below cost.

We live in interesting times, and they'll probably get more 'interesting'.

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I found an interesting article some of you may find interesting. It talks about the cost of gold mining. It says most gold mines are paying on average $1000 dollars to mine an ounce of gold. If true, this basically means the price cannot go too much lower or mining companies will have to close down creating shorter supply.

http://goldnews.bullionvault.com/gold-mining-062820123

On another note, I also heard from a mate who knows a gold miner in Australia. He basically said that the mine costs per ounce range from $600-$1200. It varies on which area of the mine is dug. Some sections produce more gold than others. So if the gold price is too cheap then they would just stop mining the expensive side of the mine

Your thoughts?

It begs the question was there any active gold mines in the ten years or so when gold was 300-400 dollars ? or was there simply no gold being mined ?

There is always going to be a case for mines not being profitable until the product is at a price that makes it viable its all about supply and demand

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It begs the question was there any active gold mines in the ten years or so when gold was 300-400 dollars ? or was there simply no gold being mined ?

There is always going to be a case for mines not being profitable until the product is at a price that makes it viable its all about supply and demand

I suspect part of the reason was that circa 2000 the price of oil was around $30 barrel,now it's more like $100. A very big cost input to mining and refining is the price of energy.

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It begs the question was there any active gold mines in the ten years or so when gold was 300-400 dollars ? or was there simply no gold being mined ?

There is always going to be a case for mines not being profitable until the product is at a price that makes it viable its all about supply and demand

Most of the 'easy' gold has already been mined. What remains is deeper, harder to get to etc.

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Most of the 'easy' gold has already been mined. What remains is deeper, harder to get to etc.

And that has happened in the last few years ?

I would believe that there are mines out there that are only viable at the quote costs but there will be mines operating at vastly lower costs

So if the demand is there the price will be high and they will all continue to operate but if demand drops the price will and they will close ,the cost off mining is irrelevant to the price someone will pay

To say it can`t go lower than the cost off mining it is completely wrong if there is no demand the price will drop then the 1300 dollar a Oz mines will close just like any other company that can`t produce it`s product at the market rate and still make a profit

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Most of the 'easy' gold has already been mined. What remains is deeper, harder to get to etc.

Yes, the grades of gold are becoming lower and lower and mine workers are having to spend considerable time just travelling underground, sometimes half the shift, to get to and from the "goldface", which can be a mile down and then along half a dozen miles.

Edited by Take Me Back To London!

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Yes, the grades of gold are becoming lower and lower and mine workers are having to spend considerable time just travelling underground, sometimes half the shift, to get to and from the "goldface", which can be a mile down and then along half a dozen miles.

Indeed. Most of the 'easy' gold has already been mined. Same goes for oil.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
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      • up 5%



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