Thursday 23rd May 2019

Resource Clips

Posts tagged ‘Golden Minerals Company (AUM)’

Clarifying cash costs

June 27th, 2013

The World Gold Council wants miners to report expenses more thoroughly

by Greg Klein

According to convention, gold can be mined for a few hundred bucks an ounce. Or, when byproduct metals are factored in, for less than nothing. But that method of reporting cash costs might be coming to an end, thanks to the World Gold Council. On June 27 the agency prodded companies to report “all-in sustaining costs” and “all-in costs metrics” to include “additional costs which reflect the varying costs of producing gold over the life cycle of a mine.” That includes exploration.

The guidelines aren’t compulsory, even for WGC members. Nevertheless council spokesperson Terry Heymann said, “We expect that many will use these new metrics, providing further consistency for investors and other stakeholders.”

The World Gold Council wants miners to report expenses more thoroughly

Goldcorp’s Porcupine fleet comprises just one of many mining expenses. With the company’s predicted all-in sustaining costs already close to the price of gold, total all-in costs would be even closer under the
World Gold Council’s new guidelines.

The WGC, which describes itself as “the market development organization for the gold industry,” devised the formula in consultation with its mining company members. Some of them began reporting all-in sustaining costs earlier this year. Barrick TSX:ABX explained its new approach in February. “Our current definition of all-in sustaining cash costs starts with total cash costs and adds sustaining capital expenditures, general and administrative costs, mine site exploration and evaluation costs, and environmental rehabilitation costs.”

As a result the company reported traditionally calculated cash costs for 2012 at $584 per ounce of gold, but all-in sustaining costs of $972. The company predicted 2013 cash costs holding firm at $584 but a drop in all-in sustaining costs to $945.

The previous month Goldcorp TSX:G explained that it considered “byproduct cash costs, sustaining capital, corporate general and administrative expenses and exploration.” But “as the measure seeks to reflect the full cost of gold production from current operations, new project capital is not included in the calculation.”

The company’s 2012 cash costs came to $645 or, after factoring in credits for other metals, a measly $315 an ounce. (Byproduct credits have given other companies negative cash costs.) But under the all-in sustaining cost formula, Goldcorp reckoned $865 an ounce for 2012. The company’s January statement forecast 2013 all-in sustaining costs at $1,000 to $1,100 an ounce, attributing the increase to inflation and “the impacts of lower grades and byproduct production at Peñasquito,” the company’s second-largest producer.

Newmont TSX:NMC and Yamana TSX:YRI ranked among others reporting all-in sustaining costs. The WGC suggests others start the next calendar year with the new guidelines.

But those announced June 27 go further than all-in sustaining costs. Now considered are costs not related to current operations: community, permitting, and reclamation and remediation. Also included are non-sustaining costs: exploration and study, capital exploration, capitalized mine development and other capital expenditures. Added together, they form the “all-in cost.”

Not factored in, however, are income tax, working capital, financing charges, “costs related to business combinations, asset acquisitions and asset disposals [and] items needed to normalize earnings, for example impairments on non-current assets and one-time material severance charges.”

The WGC considers the new approach “helpful to investors, governments, local communities and other stakeholders in understanding the economics of gold mining.” Presumably that might help clarify discussions about investment return, royalties and community benefits.

Of course the guidelines come at a time when bullion prices are falling towards or even below inflationary costs. Among last week’s most widely publicized mining news was Barrick’s announcement that it was slashing 100 desk jobs. Looked at less dramatically, that amounts to about 0.004% of the company’s 25,000 employees.

More troubling news, however, came from smaller companies. Golden Minerals TSX:AUM, Huldra Silver TSXV:HDA and Atna Resources TSX:ATN have all suspended mining over the last week, while Troy Resources TSX:TRY cut pay, staff and exploration, among other expenses. In a statement accompanying Troy’s June 27 announcement, CEO Paul Benson said, “Although we are bullish on the gold price over the medium and longer term, we will position the company to operate in the current price environment and any rise in the price of gold will be a bonus.”

Golden Minerals, Golden Tag report Mexico Results of 81 g/t Silver over 14.4m

December 12th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningGolden Minerals Company TSX:AUM in joint venture with Golden Tag Resources Ltd TSXV:GOG announced assays from their San Diego Property in Durango State, Mexico. Highlights include

81 g/t silver, 0.17 g/t gold, 1.8% lead and 1.7% zinc over 14.4 metres
(including 127 g/t silver, 0.24 g/t gold, 2.8% lead and 2.6% zinc over 6.4 metres)
46 g/t silver, 0.8% lead and 0.8% zinc over 18.7 metres
(including 118 g/t silver, 0.25 g/t gold, 2.4% lead and 1.6% zinc over 2.3 metres)
88 g/t silver, 0.8% lead and 3.2% zinc over 9 metres
106 g/t silver, 2% lead and 1.2% zinc over 6.1 metres
88 g/t silver, 0.11 g/t gold, 1.7% lead and 1.8% zinc over 7.4 metres
50 g/t silver, 0.4% lead and 1.4% zinc over 12.7 metres
112 g/t silver, 0.47 g/t gold, 2.5% lead and 2% zinc over 5 metres

Golden Tag spent US$1.5 million to earn a 50% interest in the San Diego Property from Golden Minerals, formerly ECU Silver Mining Inc. Golden Minerals is project operator.

View Company Profile

Golden Minerals Company
Jerry W. Danni
Executive VP

Golden Tag Resources Ltd
Marc A. Carrier

by Greg Klein

Golden Minerals reports Argentina Results up to 653 g/t Silver over 25m

December 8th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningGolden Minerals Company TSX:AUM announced assays from the Yaxtche Deposit of El Quevar Project in northwestern Argentina. Results include

653 g/t silver over 25 metres
(including 1,168 g/t over 10 metres)
889 g/t over 16 metres
(including 1,160 g/t over 11 metres)
535 g/t over 26 metres
(including 1,046 g/t over 3 metres)
1,151 g/t over 6 metres
440 g/t over 13 metres
467 g/t over 11 metres
(including 1,204 g/t over 2 metres)
309 g/t over 15 metres
252 g/t over 17 metres
(including 862 g/t over 3 metres)

Chairman/President/CEO Jeffrey Clevenger stated, “We continue to be encouraged by the drilling of relatively wide, high-grade silver intercepts at the Yaxtche Deposit. This further suggests that the deposit may be amenable to bulk mining, which data from the current infill drilling program is designed to support.”

View Company Profile

Jerry W. Danni
Executive VP

by Greg Klein

Golden Minerals reports Argentina Silver Assays as high as 551 g/t over 14m

April 6th, 2011

Golden Minerals Company TSX:AUM announced assays from the Yaxtché Deposit of its El Quevar Project in Argentina. Results include 629 g/t silver over 6 metres, 558 g/t over 3 metres, 592 g/t over 5 metres (including 1,314 g/t over 2 metres), 437 g/t over 12 metres (including 1,571 g/t over 2 metres), 460 g/t over 4 metres and 551 g/t over 14 metres (including 1,301 g/t over 3 metres).

Golden Minerals has decided to delay completion of its preliminary economic assessment in order to do further work on new structures that may impact the El Quevar resource and mining plan.

View Company Profile

Jerry W. Danni
Executive Vice President

by Ted Niles