Gold Miners Recorded Record High Margins in 2020
April 3, 2021
Gold producers had their most profitable year ever in 2020, based on one metric. The average all-in sustaining cost (AISC) margin, which is the gold price minus the cost to produce the metal, hit a record $828 per ounce, according to Metals Focus. What this means is that for every ounce of gold a mining company produced in 2020, it got to pocket $828 on average. This is comfortably higher than the previous record of $666 set in 2011.
The price of gold hit a record high of $2,070 in 2020, which helped increase revenues. But companies have also been focused on cost discipline. We didn’t see gold miners’ exploration budgets increase significantly in 2020, due in part to the pandemic, which forced mine closures in China, South Africa, Peru, Mexico and elsewhere.