AISC and Higher Gold price25 Oct 2018 13:48
As a Gold producer, Higher Gold price has a direct correlation on OMI as Uruguay gold mine would then become very profitable once they have completed Loryser re-structuring. If they get their AISC unit cost/oz lower, then Higher future gold price would yield higher margins at SG. AISC unit cost/oz in the previous Quarter was $1342/oz before production stopped at SG. At $1400/oz gold price, even that becomes profitable.
Higher production volumes lower the AISC unit cost/oz further. Keep a close eye on further updates here.
Just take a look at Q3 results yesterday for the below 3 gold miners.
(1) Goldcorp
- reported a loss for Q3, on lower production and higher AISC $999/oz vs $827/oz from a year ago. For Q4 they expect higher production with AISC falling to $750/oz.
(2) Barrick Gold
- reported loss for Q3, after $405m impairment charge and FX translation loss, plus lower Gold price. The average realized gold price fell to $1,216 an ounce from $1,274 in the year-ago period, while copper prices fell to $2.76 a pound from $3.05, a decline of 4.5% and 9.5% respectively.
(3) Agnico Eagle Mines Ltd. (NYS: AEM, TSX: AEM) late Wednesday reported a smaller profit in the third quarter compared to a year ago but increased its production guidance for 2018 and 2019. Net income was $17.1 million, or 7 cents per share, down from $72.5 million, or 31 cents, in the third quarter of 2017, the company said. Agnico Eagle blamed the lower profit on lower gold sales volumes, lower realized gold prices, lower by-product revenue and higher costs at several operations.
OUTLOOK:
Gold price forecast for 2019 is higher with market Analysts targets ranging from $1450 - $1700/oz.
Rossueu Asset management quoted: $1600 - $1800/oz range.
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