SEATTLE (Scrap Monster): The all-in sustaining costs (AISC) of gold surged higher by approximately 9% over the previous quarter to reach $1,232 per Oz during the first quarter of the current year, said the latest report published by Metals Focus and quoted by the World Gold Council (WGC). The AISC in the gold mining industry touched the highest level on record during the quarter.
The surge in AISC was primarily driven by rise in input costs including diesel prices, electricity tariffs, high wage rates and prices of consumables. The 4% quarter-on-quarter dip in average head grades and significant jump in US dollar costs recognised in local currencies also contributed to the surge.
The average gold industry AISC margins fell to $646 per Oz, dropping by 3% over the prior quarter. The sharp rise in average dollar gold price over the quarter mitigated the fall. The margins of gold mining industry have dropped by almost one third from the peak hit during Q3 2020. However, they still remain relatively high historically, on account of continued strength in gold prices.
Meantime, the rate of increase of AISC for the 90th percentile of the cost curve stood significantly less than the average.
The report predicts further reduction in industry margins during Q2 this year, due to relatively flat gold prices over the previous quarter.