If you’re looking for cheap gold, look no further than our selected mining companies for a 55 to 80% discount off the current market price of gold. Yes, even with rising energy costs and the recent credit crunch, there are still some miners out there–both majors and juniors–that have been able to and will continue to squeeze out gold at total cash costs under $ 400 per ounce. Considering that analysts estimate that the industry average cash cost is about $ 600 per ounce, the following companies are doing rather well:
Gold Resource Corporation (GORO)
In its early stages of production, Gold Resource Corp is targeting an astonishing $100 in total cash costs per ounce of gold for 2009. Its resources are primarily situated in the prolific San Jose de Gracia of southern Mexico and includes El Aguila, El Aire, and La Arista mine which include significant high-grade gold zones. Production at El Aguila is due to begin later this year with 70,000 oz. of gold expected.
El Dorado Gold Corporation (EGO)
Last year, El Dorado produced over 300,000 ounces of gold at $ 257 per ounce. Most recently, the company’s reported total cash costs for the Q1 2009 remained low at $ 315 per ounce. The company projects total costs to average near $ 300 per ounce for the remainder of 2009.
Goldcorp (GG)
The world’s largest gold mining company prides itself on mining gold less expensively than any other major (Tier I) gold producer. Last year, the company produced a record amount of gold at an average cash cost of just $ 305 per ounce. Along with analysts’ estimates, cash costs increased slightly in 2009 to $ 353.
Agnico-Eagle Mines (AEM)
Agnico-Eagle has considerably reduced total cash costs from $ 399 in the first quarter of 2008 to $ 325 for the first quarter of 2009. The company has, however, revised previous production estimates and now expects costs to average $ 340 per ounce of gold this year.
Rusoro Mining (RMLFF)
At $ 315 per ounce of gold in the first quarter of 2009, Rusoro reported record production and declining cash costs through its Venezuelan Choco 10 mill. Last year, cash costs averaged about $ 360 per ounce with higher production and lower costs having occurred in the fourth quarter 2008. The company projects 2009 cash costs to follow a similar range between $ 315 – $ 375 per ounce.
Minera Andes (MNEAF)
Minera Andes recently announced first quarter cash costs of $ 357 per ounce of gold at its 49%-owned San Jose, Chile mine. This represents a 21% decline from 2008’s average cash cost of $ 375 per ounce. We expect costs to remain in the $ 350 to $ 375 range.
Yamana Gold (AUY)
After a tough third quarter 2008, Yamana has recently been able to increase production while lowering cash costs. At $ 384 per ounce of gold in 2008 and just $ 379 in the first quarter of 2009, Yamana is reaffirming itself as a low-cost producer. Based on trends, the company is targeting even lower cash costs.
Aurizon Mines (AZK)
First quarter 2009 results from its Casa Berardi, Quebec mine indicated total cash costs of $ 379 per ounce of gold. This represents a 10% decline from the first quarter 2008 and an 11% decline from the previous quarter. The company is targeting an average cost of $ 390 per ounce.
Northgate Minerals (NXG)
Although its first quarter total cash costs were considerably higher than last year’s, they are still 20% lower than expectations. At $ 392 per ounce of gold, Northgate has managed to increase production by over 20% and has yielded significant drilling results at its Young-Davidson, Ontario mine.
* The term “cash costs” represents “total cash costs” represent an unstandardized, non-GAAP measure as defined by the Gold Institute and takes the following costs into account: operating, administrative, inventory adjustment, processing, fees, transportation, taxes and royalties. All cash costs are priced in US dollars and calculated on a co-product basis or average cost to produce gold unless otherwise mentioned.
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