RANKED: Top 10 lowest cost gold mines on the globe

In 2018, global gold mining companies' average all-in sustaining costs (AISC) fell 6% across the board as miners reacted to a gold price in steady decline for most of the year.

The AISC metric serve as a benchmark of a mine’s operating efficiency. They provide a more comprehensive look at mine economics than the traditional "cash costs" approach that many companies may interpret arbitrarily – and it includes important expenses such as overhead outlays and capital used in ongoing exploration, mine development and production.

Mining Intelligence, a MINING.com sister company, looked at costs at primary gold mines and ranked them based on AISC. Primary gold operations are defined by Mining Intelligence as “mines where gold contributed to 80% or more of revenues from operating activities generated last year.”

The data used by Mining Intelligence represents companies reporting quarterly production and listed on the following stock exchanges: TSX (+TSX-V), ASX, LSE (+LSE-AIM), NYSE, and JSE. The ranking excludes privately-owned mines, tailings, re-processing operations, mines where the precious metal is produced as a by-product, and operations where companies report gold-equivalent output.

Falling out of the top ten list compiled by Mining Intelligence in 2018 are two Barrick mines that were on the Mining Intelligence list compiled in 2018: Lagunas Norte in Peru, where costs have gone up from $483 to $636/oz, and Pueblo Viejo, in the Dominican Republic, where costs rose from $525 to $623/oz. The Barrick mines made way for two recently commissioned mines: B2Gold's Fekola mine in Mali, and Atlantic Gold's Moose River mine in Nova Scotia.

1 Svetloye – $425/oz

Svetloye mine. Image from Polymetals.

Polymetal’s Svetloye mine is an open-pit gold operation that located in the far east region of Russia. Despite the remote location and lack of infrastructure, high-grade ores and heap-leaching technology help this mine to produce gold at the lowest costs possible.

2 Fosterville – $442/oz

Fosterville mine. Image from Kirkland Gold.

Fosterville is the largest gold producer in the state of Victoria, Australia. The underground mine is owned by Toronto-based Kirkland Lake Gold. Production in 2018 totalled 356,230 ounces. Recently the company raised the production guidance to 550,000-610,000 ounces for 2019-2020, up from the previous guidance of 390,000–430,000 ounces.

3 Olimpiada – $468/oz

Olimpiada mine. Image from Polyus.

Located in one of Russia’s most prolific gold mining provinces, Olimpiada is Polyus’ largest operation.To treat Olimpiada’s sulphide ores, Polyus employs BIONORD, the company’s proprietary bio-oxidation technology. Successful exploration activities in the area indicate the potential for substantial extension of the life of this mine.

4 Voro – $477/oz

Voro mine. Image from Polymetal.

Voro is one of Polymetal's very first key gold assets, acquired in 1998. The mine and processing facility is located in the Sverdlovsk region of Russia. The open-pit and heap leach operation started in 2000 and has another nine years of life.

5 South Arturo – $478/oz

South Arturo mine. Image from Premier Gold Mines.

The South Arturo open-pit gold mine in Nevada is a high-grade oxide deposit amenable for highly efficient heap leaching mineral processing and extraction technology. This deposit is of the prominent Carlin-type widely known as being one of the most productive and cost efficient geological formations worldwide. Premier Gold Mines holds a 40% interest in the South Arturo property with Barrick owning the remaining 60%. Barrick processes South Arturo ore at its Goldstrike plant 5 km south of the mine.

6 Long Canyon – $505/oz

Long Canyon mine. Image from Newmont.

Newmont’s Long Canyon open-pit mine is of the same mineralization style as the South Arturo deposit, and the only significant discovery made in Nevada in the last decade. The nature of the deposit, application of a heap leach technology and tapping into existing infrastructure keep costs at Long Canyon at some of the lowest levels in the industry.

7 Fekola – $533/oz

Fekola mine. Image from B2Gold.

B2Gold first acquired the world-class Fekola gold project in Mali through a merger with Papillon Resources back in 2014. First gold pour at the Fekola mine took place three years later. The company recently decided, based on a positive PEA study, to invest $50 million into expanding the mine's capacity.

8 Cerro Negro – $535/oz

Goldcorp’s Cerro Negro mine.

Sitting 600 metres above sea level on the Patagonian plains in southern Argentina, Goldcorp’s Cerro Negro underground mine has 4.86 million ounces in proven and probable gold reserves. Commercial production began on January 1, 2015.

9 Blagodatnoye – $547/oz

Blagodatnoye mine. Image from Polyus.

Polyus commissioned Blagodatnoye in Krasnoyarsk, eastern Siberia in July 2010. Processing capacity at the open pit, located 25 km from the Moscow-based company's flagship Olimpiada mine, is 8.1 million tonnes of ore per year, which makes it one of the largest facilities of its kind in Russia.

10 Moose River – $564/oz

Atlantic Gold's Moose River mine.

Atlantic Gold’s Moose River open-pit mine is located in Nova Scotia that has a long history of gold mining. Commercial production was declared in March 2018, and in the first year production reached 90,500 ounces. Atlantic expects its phase two expansion plans will have gold production ramping up to more than 200,000 ounces per annum.

(Based on research compiled by Vladimir Basov of Mining Intelligence)

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Premier Gold shares jump on high-grade discovery in Nevada

Shares of Premier Gold Mines (TSX: PG) went up 7% at Monday's market open on news of a high-grade discovery at the McCoy-Cove project in Nevada. The company's market capitalization sits at C$345 million.

In today's press release, the company announced the discovery of a 118.9 m thick mineralized zone grading 4.12 g/t, including a high-grade interval assaying 15.74 g/t gold across 6.1 m, in the first hole drilled at the Antenna target.

The Antenna target is situated between the historic Cove and McCoy open-pit mines that produced 3.3 Moz. gold and 110 Moz. silver between 1986 and 2006.

In Januray 2018, Premier entered into an agreement with Barrick Gold (TSX: ABX; NYSE: GOLD) whereby Barrick could earn a 60% stake in the McCoy-Cove project by spending $22.5 million in exploration prior to June 30, 2022, with Barrick assuming the operator role.

Last year, Premier and Barrick completed a $4.4 million program funded by the gold major that included 14 holes and 4,738 m of core drilling. Earlier this year, the partners then prioritized exploration targets, including Antenna and six other targets.

So far, the 2019 exploration program has completed four reverse circulation (RC) drill holes in 2,729 metres.

(A version of this article first appeared in The Northern Miner)

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Erik Wetterling – The Hedgeless Horseman – Thu 11 Apr, 2019

Thoughts on Liberty Gold and Premier Gold Mines

I’ve been hearing about Liberty Gold and Premier Gold Mines a lot recently from both some of my guests and email from all of you. Since Erik and I really had nothing new to say on the overall metals markets we decided to discuss these companies. Remember these are just our thoughts.

Click here to visit Erik’s site – The Hedgeless Horseman.

Click here to find out more about Liberty Gold.

Click here to find out more about Premier Gold Mines.

Premier to pay $7m for polymetallic property in Mexico

Premier Gold Mines (TSX:PG) announced this week that it entered into an agreement with Americas Silver Corporation to acquire an option to purchase a 100% interest in the San Felipe property in Mexico.

To move forward with the deal, Premier has to pay $7 million on closing and make additional payments of $1.9 million upon the making of a positive construction decision and then upon achieving commercial production.

San Felipe, whose underlying owner is Britain’s Hochschild plc, is located 55 kilometres from Premier's Mercedes mine in the northwestern state of Sonora.

In a press release, the Thunder Bay-based miner said that the property consists of a series of claim groups that comprise 16,265 hectares with several polymetallic zones that host a high-grade historic mineral resource and has potential for future discoveries.

San Felipe hosts several existing deposits open for expansion.

San Felipe is partially developed with an existing ramp, several mining-related facilities on-site and 69,000 metres of drilling already performed in different areas.

"San Felipe represents a strategic asset, adding resources and providing a near-term development opportunity in close proximity to an existing operation," Ewan Downie, President and CEO of Premier Gold, said in the media statement. "We will assess options to bring San Felipe to production to complement existing production in Mexico."

According to Downie, his firm plans to evaluate potential development options which may include adding a parallel floatation circuit at Mercedes to increase annual output in the near-term; building a stand-alone mill at San Felipe; and bringing San Felipe into development at the end of the Mercedes mine-life and processing mineralized material at the existing complex.

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Greenstone’s Hardrock project approved by environmental ministry

Greenstone Gold Mines – a 50:50 joint venture of Centerra Gold and Premier Gold Mines – has received approval from the provincial environment ministry for development of the Hardrock gold mine 2 km south of Geraldton, Ontario. Federal approval was received late last year.

An open pit and 27,000 t/d mineral processing plant are planned. The pre-production capex will be near C$1.25 billion to create a project that produces an average of 300,000 oz. of gold over a 14.5-year mine life. The project has a an expected after tax net present value (5% discount) of $818 million, an internal rate of return of 17.5%, and a payback period of 4.5 years.

The project has probable open pit reserves of 141.7 million tonnes grading 1.02 g/t gold for 4.6 million contained oz. Both the indicated and inferred estimates contain underground as well as open pit resources. The cut-off for pit material is 0.30 g/t and for underground is 2.0 g/t. Using those numbers, the indicated resource is 25.1 million tonnes at 2.29 g/t gold for 1.9 million contained oz., and the inferred portion is 21.7 million tonnes at 3.55 g/t gold for 2.5 million contained oz.

The 2019 work plan for Hardrock is to advance the permitting process, proceed with detailed engineering, drill a further 18,000 metres to update reserve and resource estimates, incorporate the optimization work that was done over the past two years, and update the project economics.

(This article first appeared in the Canadian Mining Journal)

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Hardrock gold project greenlighted by Canada’s Environment Minister

Canada’s Minister of Environment and Climate Change, Catherine McKenna, said this week that if mitigation measures are taken, Greenstone Gold Mines’ Hardrock gold project is not likely to cause significant adverse environmental effects.

The project consists of the construction, operation, decommissioning, and abandonment of an open pit gold mine and onsite metal mill located near Geraldton, in northern Ontario.

Following a review of the Environmental Assessment Report and the comments received from Indigenous peoples and the public, McKenna decided to support the proposal. In her Decision Statement, the government official establishes 116 conditions to protect fish and fish habitat, migratory birds, human health, the current use of lands and resources for traditional purposes, physical and cultural heritage, and species at risk, and includes mitigation measures and requirements for a follow-up program that the proponent must fulfill.

“My decision is based on rigorous scientific evidence, expertise from federal departments and extensive consultations with the public and Indigenous groups and includes conditions that will ensure there are mitigation measures to reduce the risks of environmental effects. Our government is working to protect the environment while supporting projects that create good middle-class jobs,” the Minister said in a media statement.

A historic headframe at Premier Gold Mines' Hardrock gold project in Ontario. Photo by Premier Gold Mines.

Greenstone is required to manage effluent and surface water quality, undertake progressive reclamation of the land, minimize emissions of dust and airborne contaminants, and provide access routes to lands used for traditional purposes.

Following McKenna’s approval, the Oakville-based miner will be required to obtain additional authorizations and permits from federal departments.

Greenstone Gold Mines is a 50/50 partnership between Centerra Gold and Premier Gold Mines for the joint ownership and development of the Hardrock and other properties in Ontario.

Hardrock is a contiguous block of ground and consists of 292 patented claims, leases and Licenses of Occupation covering approximately 5,148.3 hectares, and 39 unpatented mining claims covering 10,128 hectares for a total approximate area of 15,276.3 hectares.

The open-pit operation is expected to have a mine life of almost 15 years and it is forecasted to produce 4.2 million ounces at 1.02 g Au/t.

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