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8 Pages

Gold mining: what to look for in 2016


Gold mining: what to look for in 2016

Report summary

As the strength of the US$ continues to put downward pressure on the gold price, we expect to see further costs cuts as the industry continues to pursue improved margins. Miners in countries such as Russia, South Africa can expect strong windfalls from significant local currency devaluation relative to the US$. Although we don't expect a repeat of the impairments that plagued the sector in 2013/2014, the potential does exists for the industry to adopt a more conservative approach to reserve price estimation, resulting in shorter mine lives at operating mines as mine plans are reviewed. Although non-essential sustaining capex continues to be delayed/cut, reserve attrition and the forecast decline in global production from 2018 may trigger a trend reversal as miners focus on brownfield and greenfield exploration.

What's included?

This report includes 1 file(s)

  • Gold mining: what to look for in 2016 PDF - 446.38 KB 8 Pages, 0 Tables, 7 Figures

Description

This Metals Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For industry participants and advisors who want to look at the trends, risks and issues surrounding this topic, this report gives you an expert point of view to help inform your decision making.

Our analysts are based in the markets they analyse and work with high-quality proprietary data to provide consistent and reliable insight.

We provide unique in-depth analysis of the metals supply industry so you can make confident strategic decisions.

  • Executive summary
  • Where is the US dollar headed in 2016, what does this mean for the gold price?
  • Industry reserve position – can we expect a repeat of the impairments seen in 2013/2014?
  • Global gold mine production view for 2016
  • Gold mining costs in 2016 – fourth consecutive year of cost deflation
  • The health of the gold mining project pipeline in question
  • Free cash flow, capital allocation, financing and M&A
  • Conclusions

In this report there are 7 tables or charts, including:

  • Executive summary
    • Components of expected total cash cost plus sustaining capex (TCPS) variation from 2015 to 2016
  • Where is the US dollar headed in 2016, what does this mean for the gold price?
    • 2013 to present day view of the USD index, cross Atlantic yield differentials and the gold price.
  • Industry reserve position – can we expect a repeat of the impairments seen in 2013/2014?
    • Reserve price assumptions for top 15 gold producers as of end 2014.
  • Global gold mine production view for 2016
    • Global gold production and metal price evolution.
  • Gold mining costs in 2016 – fourth consecutive year of cost deflation
    • Total cash cost plus sustaining capex (TCPS) variation from 2015 to 2016
  • The health of the gold mining project pipeline in question
    • Incentive price curve for identified primary gold mines.
  • Free cash flow, capital allocation, financing and M&A
    • Wood Mackenzie project pipeline demonstrating capital costs over LoM for projects and price paid for 2014/2015 acquisitions.
  • Conclusions
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