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Gold price fall may trigger another round of write-downs

Data recently published by Wood Mackenzie illustrates that at US$1,100 per oz. gold, about 10% of current gold mine production is uneconomic on a total cash cost plus sustaining capex basis.


Data recently published by Wood Mackenzie illustrates that at US$1,100 per oz. gold, about 10% of current gold mine production is uneconomic on a total cash cost plus sustaining capex basis.

If the gold price slips to US$1,000 per oz, that percentage climbs to about 18% and at US$900 per oz it rises to about 31%, Ryan Cochrane, a senior research analyst at the metals and mining consultancy with a PhD in geology, says in an interview with The Northern Miner from his office in London.

Cochrane also notes that at current gold prices, about 40% of project production capability is uneconomic, and that percentage increases to between 45% and 50% at US$1,000 per oz gold and to nearly 60% at US$900 per oz gold.

“If prices get to the US$900 per oz level, there is going to be a bloodbath,” the analyst says, noting that even if gold falls to US$1,000 per oz, it is likely to trigger another round of impairments – a repeat of what happened across the gold industry in 2013.

Read the complete article at NorthernMiner.com/news/gold-price


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