A survey of 7 top gold mining companies shows expectations of 2.3% growth in gold production for 2013. The mining companies recently reported 2012 actual results and presented estimates for 2013.
The gold mining industry appears to be able to grow production by only 2.3%. And, the cost of producing all ounces of gold is trending up by over 20%.
As a gold bull it is reassuring to see gold supply so limited. 235,000 ounces of the estimated growth is due to strikes at AngloGold mines in South Africa during 2012.
Calculating gold production for each company on comparable basis is difficult. Some publish estimates for gold sales and some for production. Some report sales and production of gold equivalent ounces (GEO) which includes silver production converted to GEO at a price ratio. The ratio is typically about 50:1. In addition the production data may be attributed or managed production. Attributed includes only ounces that are owned by the company. For example, if Mine Co is responsible for managing a mine of which they own 60%, the attributed production would be 60% of the mines total or manged production. In this way the table above could be double counting the production of a specific mine that is jointly owned. These differences do not have a material impact to the trend because they affect 2012 and 2013 similarly.
Reporting of production costs is even more diverse than production. Each miner has their own definition of production cost, cash cost, sustaining cash cost, etc. Estimated total production cost as defined by each company weighted for their respective production increases 20% in 2013.
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