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Gold mining: what to look for in 2016

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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.

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  • Document

    Gold mining: what to look for in 2016

    PDF 446.38 KB

Table of contents

Tables and charts

This report includes 7 images and tables including:

Images

  • Components of expected total cash cost plus sustaining capex (TCPS) variation from 2015 to 2016
  • 2013 to present day view of the USD index, cross Atlantic yield differentials and the gold price.
  • Reserve price assumptions for top 15 gold producers as of end 2014.
  • Global gold production and metal price evolution.
  • Total cash cost plus sustaining capex (TCPS) variation from 2015 to 2016
  • Incentive price curve for identified primary gold mines.
  • Wood Mackenzie project pipeline demonstrating capital costs over LoM for projects and price paid for 2014/2015 acquisitions.

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