Monsters of Rock: The cost of producing Aussie gold has jumped by 10pc

Aussie and Kiwi gold miners saw their average all in sustaining costs rise 10.3% in the September quarter to $2012/oz
Capricorn and Alkane among the lowest cost pure play gold producers
Materials sector rises 0.22%

Inflation is running rampant these days and gold mines are no exception.

Indeed, they’ve crashed through an unwanted milestone, with all in sustaining costs at Australian and New Zealand gold mines climbing above $2000 per ounce in the September quarter.

According to analysis from Aurum Analytics and Argonaut PCF in its quarterly gold report, the average AISC rose 10.3% or $188/oz in September to $2012/oz, up from $1824/oz in the June quarter.

While that came against an average gold spot price of $2629/oz (US$1729/oz), a level at which large scale producers should still be turning big profits, it’s worth noting AISC is a measure that does not take everything into account.

Last month we unpacked some of the standout performers for you.

Read: Which ASX gold miners are getting the best bang for their buck?

Unsurprisingly, Aurum fingered Capricorn Metals’ (ASX:CMM) Karlawinda mine ($1166/oz) and Alkane Resources’ (ASX:ALK) Tomingley Mine ($1191/oz) as two of the best gold only performers.

Among Australia’s biggest gold mines, AngloGold Ashanti’s (ASX:AGG) and Regis Resources’ (ASX:RRL) Tropicana was a big standout, delivering 121,920oz at $1237/oz.

Evolution Mining’s (ASX:EVN) Ernest Henry and Newcrest’s Cadia Valley technically delivered 20,655oz and 142,194oz at -$1701/oz and $157/oz, respectively.

But that’s because they count massive copper credits against their costs. With that factor removed, Aurum estimates the true production cost on a co-product basis would have been a still impressive $1373/oz and $1251/oz.

Exactly half of the 48 gold operations covered by Aurum delivered AISC above $2000/oz, with Mandalay Resources’ Victorian operation Costerfield a high grade standout at 12,526oz at 11.91gt for $1226/oz (Agnico Eagle did not provide AISC on the 15g/t Fosterville mine).

But grade was not king when it came to containing costs, with 5 of the top 7 lowest cost mines under 2g/t and all of the top 3 — Ernest Henry, Cadia and Karlawinda — delivering gold at a grade of under one gram.

Goldies share prices today:

Miners hold the fort

The materials sector lifted 0.22%, holding the fort as a bear raid hit the rest of the ASX 200.

Major miners held firm, with Rio (ASX:RIO) the only one of the big iron ore plays to go red.

BHP (ASX:BHP) closed the day up slightly while FMG (ASX:FMG) was up 2.27% as iron ore futures were relatively unchanged at US$108.15/t.

Lithium miner Pilbara Minerals (ASX:PLS) also closed the day in fine form along with niche high grade iron ore plays Grange Resources (ASX:GRR) and Champion Iron (ASX:CIA), copper miner 29Metals (ASX:29M) and coal stocks Coronado (ASX:CRN) and Yancoal (ASX:YAL).