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Steve Herschbach

True Cost To Mine Gold - Companies Under Pressure

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At current prices a lot of operations are right on the cusp of profitability when considering the "all in sustaining cost of production".

See:  Many Gold-Mining Companies Losing Money Despite Cutting Costs

and

See: http://www.kitco.com/news/2015-08-05/Metals-Focus-Much-Gold-Output-Operating-At-Loss-On-AISC.html

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Good article.  There is a wide discrepancy between profitability using TCC vs AISC.  

 

There was a big push a few years back for gold producers to un-wind their hedging to the gold price.  That was during the great bull run.  I bet a lot of the producers wish they had done some hedging on this multi-year decline.

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The whole hedging thing is tough unless you can see into the future to know exactly what prices will do. when they are sliding down, you look like a genius if you can sell at higher prices. On the other hand if they go up, you look like a dunce for locking in a price less than market.

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