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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Newmont Goldcorp to halt Mexico mine due to blockade

Newmont Goldcorp Corp (NYSE: NEM) (TSX: NGT) said Monday it will temporarily halt operations at its Peñasquito gold mine in Mexico due to illegal blockade by a trucking contractor and some members of the Cedros community.

The Peñasquito mine produced 272,000 ounces of gold in 2018, the company said.

More to come…

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Still a way to go to achieve gender balance in the mining industry

Following the gender session held this at this year's PDAC, where gender balance in the industry and the #MeTooMining initiative were discussed, the Responsible Mining Foundation issued a summary report related to the topic.

The summary is based on a chapter of RMF's 2018 Responsible Mining Index and it presents an assessment on the performance of 30 of the most important mining companies in the world when it comes to the properly integrating women into their workforce.

"The RMI 2018 results reveal that most of the 30 companies assessed show little or no evidence of efforts to strengthen the gender balance of their leadership and governance teams," the summary reads. "The companies scored an average of only 4.5% on the question of implementing interventions to bolster the diversity and inclusivity of their boards and senior management. These results tie in with other research that has shown very low levels of women's participation at these levels."

Chile's Codelco is a good performer when it comes to gender issues as it has established company-wide principles and guidelines on the provision of gender-appropriate bathrooms, changing rooms, work clothes, PPE, and rooms for women workers to express and store breastmilk. Photo by Codelco.

According to the Switzerland-based non-profit, there is also room for improvement beyond board and senior management levels as their estimates suggest that women occupy approximately 10% of jobs in the large-scale mining sector.

"Gender-based bias and discrimination in hiring practices play a role in this, as do work schedules that interfere with family responsibilities and cause social isolation, making mining work unattractive for many women," the RMF document states.

The organization based the previous statement on its experts' believe that there is persistence of old paradigms within the industry, such as the outdated idea that women are not strong enough to work in underground mines.

For instance, the report brings back the fact that South Africa repealed a ban on women underground miners just a decade ago while India did the same only this year.

In the RMF's view, companies stand to benefit from having more women in their workforces. "Higher female workforce participation can also raise attendance and retention rates and reduce organisational risks within businesses. Mine managers cited that greater gender diversity fostered innovation and improved team dynamics and communications."

The NGO refers to managers in companies such as BHP, where there is a plan of action to achieve gender parity in all divisions by 2025, and Newmont, where the plan is to achieve gender parity in senior management by 2030, with a near-term goal of women holding at least 30% of senior roles. Similar targets exist at AngloGold Ashanti and AngloGold American.

The gender chapter in the Responsible Mining Index concludes with a call to increase safety measures for women working in the mining industry, particularly after a Canadian study revealed that almost 40% of women working in mine sites reported having experienced harassment in the last five years.

"It is at the mine-site level where women are most vulnerable to unsafe and hostile working conditions," the dossier reads. "The RMI 2018 results show that the vast majority of the assessed companies are unable to demonstrate that they have systems in place to ensure the provision of gender-appropriate PPE [Personal Protective Equipment] for their women workers: over 75% of the companies assessed scored zero on this question. And while many have policies in place to prevent sexual harassment, 75% of the companies show no evidence of systematic measures to prevent harassment of women workers."

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Barrick, Newmont joint venture in Nevada clears all hurdles

Newmont Goldcorp (NYSE:NEM)(TSX:NGT) and Canada’s Barrick Gold (TSX:ABX)(NYSE:GOLD), the No. 1 and 2 bullion producers, have cleared all the regulatory conditions to combine their operations in Nevada ahead of schedule.

The U.S. Federal Trade Commission, said the companies, granted an early termination of the waiting period under the Hart-Scott-Rodino Act on April 19.

The new business, yet to be named, will be owned 38.5% by Newmont Goldcorp and 61.5% by Barrick, which will also be the operator of what the partners say it’ll be the world’s largest gold producing complex.

The “historic” business combination (as the duo called it) is expected to generate savings of $500 million a year within the first full five years. It includes Barrick’s Goldstrike, Cortez, Turquoise Ridge, and Goldrush and Newmont’s Carlin, Twin Creeks, Phoenix, Long Canyon, along with associated processing plants and infrastructure of both companies.

Excluded from the joint-venture, for now, are Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits. It also does not include Newmont’s Cripple Creek & Victor mine.

The agreement follows Newmont’s rejection of Barrick’s $18 billion hostile bid last week, countering with a proposal for a JV with a 55% interest for Barrick.

Newmont’s contra-offer wasn’t immediately welcome by the Toronto-based miner, which wanted a higher percentage and control of the venture.

After exchanging quite a few mutual verbal offences, the chief executives of the long-time rival miners reached a consensus over dinner in New York last month.

Practical measures required to integrate the joint venture assets and establish the new business are now being taken, the partners said, and they are anticipated to be complete within the current quarter.

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Case closed: Newmont Goldcorp becomes world’s No. 1 gold miner

Newmont Mining’s $10 billion acquisition of Canada’s Goldcorp closed Thursday, giving birth to Newmont Goldcorp Corporation (NYSE: NEM)(TSX: NGT), the world’s largest gold producer by market value, output and reserves.

The mammoth company, to be led by Gary Goldberg until the end of the year, will mine in the Americas, Australia and Ghana, producing between 6 and 7 million ounces of gold annually over the next ten years and beyond.

A key reason for the business combination was the synergies and cost-savings the merged company could achieve. Newmont Goldcorp expects to immediately start delivering on an estimated $365 million in expected annual pre-tax synergies, supply chain efficiencies and other improvements. This is expected to include the sale of $1 billion to $1.5 billion of assets over the next two years.

Newmont Goldcorp is now the world’s largest gold producer by market value, output and reserves, as well as the only bullion producer listed in the S&P 500 Index.

"We've met our goal to become the world's leading gold business, and we'll maintain that position by executing our winning strategy. That strategy focuses on constantly improving safety and efficiency at our current operations while we continue to invest in expansions and exploration to fuel next generation production," said Goldberg, who is retiring by the end of the year.

Former Newmont’s chief operating officer, Tom Palmer, will then take over as CEO of the new company, based in Vancouver, British Columbia.

The company will continue trading on the New York Stock Exchange (NYSE) under the ticker NEM and will begin trading on the Toronto Stock Exchange (TSX) under the ticker NGT. Goldcorp's shares will be delisted from the NYSE before market open on April 18 and from the TSX after market close on April 22.

The assets Newmont Goldcorp is anticipated to put on the chopping block, combined with mines Barrick plans to sell in the wake of its acquisition of Randgold Resources earlier this year, is expected by analysts to fuel further sector deals.

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Mega-mergers will bring short-lived glory if miners ignore innovation — opinion

The writing is on the wall for Canadian mining companies and it has been for quite some time. Their glory days as a global leaders are fading – and mega-mergers won’t bring salvation.

Market signals are already showing troubling signs of this shift in the sector. While Canada’s GDP saw a 0.3% lift in January, which was the biggest gain in eight months, this dramatic uptick didn’t spill over into every industry. Mining still felt the pinch in a time where miners globally are revelling in rebounding commodity prices and company profits. This should be no surprise since Canada’s share of international exploration has dwindled to 13.8% in 2017 from 20.5% in 2008, according to the Mining Association of Canada.

One bright side of consolidation is the shifting landscape may open up growth opportunities for Canadian junior and mid-tier miners

The most significant signs of change are the mega-merger of Barrick Gold and Randgold and Newmont’s acquisition of Goldcorp which will move two of the largest miners out of the country, as well as greatly decrease the market cap of mining companies within its borders.

One bright side of consolidation is the shifting landscape may open up growth opportunities for Canadian junior and mid-tier miners, such as Agnico Eagle Mines. Mergers within this tier are also a likely business maneuver, which will be difficult to disregard as a means of expansion, when comparing recent M&A activity and their incentives.

For instance, the Barrick Gold-Randgold merger foresees the creation of “an industry leading gold company with the greatest concentration of Tier One gold assets in the industry, led by a proven management team of owners, as noted in Barrick’s press statement.

For the Goldcorp-Newmont pact, Newmont in a press statement boasts of the creation of the largest gold reserves and resource base, an unparalleled project pipeline on four continents and a world-class portfolio of gold mining operations and projects.

Both rationales are strategically sound but consolidation fails to solve this industrial paradox: if you don’t grow your reserves, you’re shrinking and depleting your core assets. What good is it to have the best or largest concentration of assets, if the desire to grow the company is mismatched with the capability to grow the company? In this scenario, bigger isn’t always better. The aspiration for a new era of profitability must be met with sustained investment in innovation that delivers on both radical improvement and transformation.

The prevailing drawback, however, is the industry’s lack of investment in forward thinking approaches. Mining companies will undermine their performance and returns on capital by ignoring this ever growing innovation deficit. To close the gap, Canada’s path to profitability will require a different playbook.

Instead of only focusing on Tier One assets in tier one countries, miners should rethink and invest in business models that make money on any asset (tiers 1, 2 or 3) in any reasonably stable country. This approach allows for innovation to spur mine profitability independent of size.

Mining companies will undermine their performance and returns on capital by ignoring this ever growing innovation deficit

Yet, the core problems lie at what’s missing in most corporate infrastructures – the lack of commitment to long-term multi-lateral collaboration within mining ecosystem, the lack of corporate commitment to innovation and the lack of collaboration with other industries who have faced and overcome similar problems. This is then amplified by the fragmentation of public-private innovation investment across provinces, reducing the impact and value of these investments. The majority of the risk capital is directed at exploration, rather than the start-up supplier community.

In spite of the obstacles, a turnaround is foreseeable. Canada’s next generation of mining companies will need to sharpen their competencies at identifying, testing, piloting, adopting and scaling new technologies at speed. A better future will also include sustainability, along with a social license to operate, as an imperative to drive innovation and technological changes.

For now, it’s too early to predict whether these mega-mergers will usher in a new vision for the industry or will even survive. Nevertheless, Canadian miners must not solely rely on M&A, big or small, as a source of value creation.

(This article first appeared in the Canadian Mining Journal)

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Newmont-Goldcorp $10B merger to close this week

Gold giant Newmont Mining’s (NYSE:NEM) $10 billion acquisition of Canada’s Goldcorp (TSX:G) is expected to close this week as the deal has received Investment Canada Act approval.

Last week, almost 98%of Newmont’s shareholders approved the deal, which creates the world’s largest gold producer by market value, output and reserves, and robs Barrick of its recently cemented supremacy. Earlier this month, Goldcorp’s investors also gave the transaction their thumbs up.

Deal creates the world’s largest gold producer by market value, output and reserves.

The combined company, to be called Newmont Goldcorp, will mine in the Americas, Australia and Ghana, producing between 6 and 7 million ounces of gold annually over the next ten years and beyond, the parties said.

It will be initially led by Goldberg, who is retiring by the end of the year. Tom Palmer, the company’s current chief operating officer, will then take over as CEO. Goldcorp's Vancouver office, in turn, will become the designated base for North American operations for Newmont Goldcorp.

As part of the transaction, Newmont has committed to sell between $1 billion and $1.5 billion worth of assets over the next two years. It has also promised initial cost savings of $100 million a year.

The assets Newmont-Goldcorp is expected to put on the chopping block, combined with mines Barrick plans to sell in the wake of its acquisition of Randgold Resources earlier this year, is expected by analysts to fuel further sector deals.

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Newmont shareholders give a solid approval to $10B takeover of Goldcorp

Shareholders in US gold giant Newmont Mining (NYSE:NEM) have almost unanimously approved the miner’s proposed $10B takeover of Canada’s Goldcorp (TSX:G) (NYSE:GG), a deal that creates the world’s largest gold producer by output, robing Barrick of its recently cemented supremacy.

More than 97% of the votes were in favour of the transaction, first announced in January, and which is expected in the second quarter of the year.

The resounding approval comes only a week after Goldcorp’s investors also gave the deal their thumbs up.

“We thank Newmont’s shareholders for their overwhelming support for this compelling value creation opportunity as we build the world’s leading gold company,” Newmont’s chief executive, Gary Goldberg, said in the statement.

The combined company, which will be called Newmont Goldcorp, will mine in the Americas, Australia and Ghana, producing between 6 and 7 million ounces of gold annually over the next ten years and beyond, the parties said.

As part of the transaction, Newmont has committed to sell between $1 billion to $1.5 billion worth of assets over the next two years. It has also promised initial cost savings of $100 million a year.

The new gold miner will be led by Goldberg, who is retiring by the end of the year. Tom Palmer, the company’s current chief operating officer, will then take over as the CEO.

More to come…

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Newmont readies leadership team post-merger with Goldcorp

US gold giant Newmont Mining (NYSE:NEM) has put together an executive leadership team that will come into effect once its acquisition of Canada’s Goldcorp (TSX:G) (NYSE:GG) is completed, which is expected to happen in the second quarter.

The group, says the company, will feature some of the industry’s best talent and most experienced mining executives known for superior operational execution, consistent project delivery and leadership in safety and sustainability.

Chief executive Gary Goldberg will remain as such until the fourth quarter, when he will retire, to be succeeded by Tom Palmer. 

“Going forward, Newmont Goldcorp will maintain its focus on the success and continuity of our business through strategic leadership development, building high performing teams, and robust succession planning,” Tom Palmer, President and COO, said in a statement.

Chief executive Gary Goldberg will remain as such until the fourth quarter, when he will retire, to be succeeded by Tom Palmer who keeps his role of President.

Rob Atkinson will take over the COO position on June 1.

Other promotions include Jennifer Cmil as executive VP for human resources, Dean Gehring as VP and chief technology officer, Steve Gottesfeld as executive VP and chief sustainability and external affairs officer and Nancy Lipson executive VP and general counsel.

Randy Engel will remain as VP for strategic development and Marcelo Godoy as senior VP for exploration.

Newmont and Goldcorp announced their $10 billion combination in January, but the deal was faced recent challenges, with Newmont shareholders revolting over an “unfair” benefit that Goldcorp shareholders would have following the Nevada joint venture agreement between Newmont and Barrick.

The Greenwood Village, Colorado-based mining giant weathered the storm by promising investor to sweeten the pot with the largest dividend in 32 years.

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Newmont offers special dividend if Goldcorp takeover approved

US gold giant Newmont Mining (NYSE:NEM) has offered investors a one-time special dividend of 88 cents per share, if its $10 billion-friendly takeover of Canada’s Goldcorp (TSX:G) (NYSE:GG) is approved.

Some of Newmont’s shareholders, including hedge fund giant Paulson & Co., have criticized the deal, saying it would deliver outsized benefits to Goldcorp shareholders, given that company's poor performance.

Paulson, which holds 14.2 million shares in Newmont, said it would support the current takeover bid if the premium offered to Goldcorp shareholders is adjusted.

Newmont said the immediate cash payment, worth $470 million, would represent a portion of the savings from its recently-announced joint venture with Barrick in Nevada.

Joe Foster, a portfolio manager at VanEck — one of the biggest Newmont shareholders — focused his criticism on the “outrageous payouts” that would be given to Goldcorp executives after the merger.

“I don’t think shareholders should support the lavish lifestyles of the Goldcorp executives for one thing,” Foster told Bloomberg last week. On top of that, it is unfair that Goldcorp shareholders should benefit from the recently-announced joint venture between Newmont and Barrick Gold Corp. in Nevada, given that was negotiated after the Goldcorp-Newmont terms were set, he said.

Goldcorp shareholders are set to vote on the deal that would create the world’s largest producer by output on April 4, and Newmont investors on April 11.

Greenwood Village, Colorado-based Newmont also announced the Mexico’s Competition Commission had approved the deal without conditions. This follows clearance from the Canadian Competition Bureau and the Korea Fair Trade Commission in February.

Goldcorp shares climbed 2.5% to C$14.88 in early trade on Monday in Toronto. Newmont jumped 1.7% to a one-month high of $35.10 in New York.

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