Gold stock indices have outperformed the metal this year thanks to consistently improving results from the miners. Operating (cash) costs have declined since a relentless inflationary spiral peaked in early 2013. Capital projects have been pared, improved, or shelved. Many companies have met or beat guidance this year. Management focus on further improvements suggests the trend can continue in the low gold price environment. The industry has geared itself around a USD 1200 gold price with room to economize further if needed. The low cost structure also positions the miners favorably for any increase in prices.
Projected 1Q 2014 Co-Product Cash Costs (USD/oz)
Source: UBS Global Research. Gold Producer: Cash Cost Tracker Q1/2014
Data as of 21 April 2014
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