Majors losing costs battle, intermediates better

Gold equivalent production from the eight major Western producers inched up 1.4% in 2023 to an aggregate 25.02Moz from 24.68Moz in 2023, led by Newmont at 6.4Moz.

The biggest gain was seen at PanAmerican Silver, which increased by 27.1% to 1.16Moz following the acquisition of several gold mines from Yamana Gold. The biggest decline was seen at Endeavour Mining, which fell 21.4% to 1.1Moz.

The increase in all-in-sustaining costs (AISC) continued, although the rate of increase was moderated compared with the prior year. The aggregate AISC increased 7.4% to US$1294/oz from $1205/oz in 2022.

Endeavour Mining led the way with an AISC of $967/oz, while PanAmerican was the only company to achieve a reduction. Its AISC fell 16.8% to $1371/oz. However, several companies experienced double-digit increases, including AngloGold Ashanti (14.4%), B2Gold (17.2%), Gold Fields (17.2%) and Newmont (19.2%).

Cost increases are outweighing the gains from the rising gold price for the majors, with the average AISC margin shrinking 20.6% in 2023 to $629/oz from $792/oz in 2022.

Majors saw their aggregate cash position fall 10.9% in 2023 to $10.7 billion, while their aggregate debt increased 7% to $19.2 billion.

Other companies in this group are Agnico Eagle Mines, Barrick Gold and Kinross Gold.

Intermediates

The aggregate production of the 18 intermediate companies increased 0.8% in 2023 to 7.22Moz from 7.17Moz in 2022. Calibre Mining increased its output 27.7% to 283,494oz, closely followed by New Gold with 22% growth to 423,517oz. Alamos Gold, Fortuna Silver, SSR Mining and Victoria Gold also posted double-digit increases. IAMGOLD reported the biggest decline, falling 23.5% to 218,798oz.

The intermediates appeared better at controlling costs, with their aggregate AISC increasing just 2.9% to $1352/oz in 2023 from $1314/oz in 2022. Eight companies saw their AISC reduce, with New Gold (-15%) leading. The highest increase was seen at Torex Gold (19%), while OceanaGold and IAMGOLD also experienced double-digit increases. Dundee Precious Metals was the lowest-cost producer among the intermediates at $849/oz, closely followed by Lundin Gold at $860/oz.

Cost increases are in lock-step with the rising gold price for the intermediates, with the average AISC margin shrinking 5.3% in 2023 to $540/oz from $570/oz in 2022.

Intermediates saw their aggregate cash position increase 3.9% in 2023 to $3.8 billion, while their aggregate debt increased 6% to $4.9 billion.

The intermediate group also includes Argonaut Gold, Aris Mining, Aura Minerals, Coeur Mining, Eldorado Gold, Equinox Gold and Mineros.