The World’s Top 10 Lowest Cost Gold Mines in 2019

Fosterville operation in Australia was the lowest cost gold mine in the world in 2019 measured by AISC. Eight out of the top 10 lowest cost gold mines located within the former Soviet Union domain.

Previously, Mines and Metals ranked largest gold producing countries, biggest gold producers and top gold mines by production worldwide in 2019.

In this report, Mines and Metals looked at costs at operating primary gold mines worldwide using all-in sustaining costs (AISC) metric that serves as a globally accepted benchmark of a mine’s operating efficiency.

Primary gold operations are defined by Mines and Metals as “mines where gold contributed to 90% or more of revenues from operating activities generated last year.”

The ranking excludes privately-owned mines, tailings re-processing operations, mines where the precious metal is produced as a by-product, and operations where companies report gold-equivalent output.

Fosterville, Kirkland Lake’s unique underground mine in Australia, tops the list of lowest cost gold mines. 34% in costs improvement achieved over the 2019 year brought gold AISC down to a remarkable $291/oz at this highest-grade gold mine in the world.

Fosterville is followed by three mines in Russia, Polymetal’s Svetloye ($449/oz), Polyus’ Olimpiada ($455/oz) and Polymetal’s Voro ($460/oz).

Overall, six gold mines from Russia are in the top 10 list, which is a unique accomplishment. When Kyzyl mine in Kazakhstan ($514/oz, fifth position) and Kumtor mine in Kyrgyzstan ($598/oz, eighth) are counted in, then eight out of top ten lowest cost gold mines in 2019 located within the former Soviet Union domain, – kudos to the Soviet geological service that established quality mineral resource base of multiple commodities in many countries.

The detailed analysis is below.

Lowest Cost Gold Mines in 2019

Source: Mines and Metals, based on corporate reports.

1. Fosterville, Australia – $291/oz.

Fosterville gold mine
Fosterville mine. Sorce: Kirkland Gold.

Kirkland Lake’s Fosterville mine located in the state of Victoria, Australia, is the highest grade and lowest cost gold operation in the world. Production at Fosterville in FY 2019 increased by a whopping 74%, to 619,366 ounces, mainly reflecting a 59% improvement in the average grade, to 39.6 g/t compared to 24.9 g/t in the previous year. Both operating cash costs and AISC per ounce sold were significantly improved in FY 2019 versus the previous year, with the improvement largely related to the favourable impact of a higher average grade on sales volumes. AISC averaged $291 per ounce sold versus $442 per ounce sold a year earlier in FY 2018.

2. Svetloye, Russia – $449/oz.

Svetloye gold mine
Svetloye gold mine. Image: Polymetal.

Polymetal’s Svetloye mine is an open-pit gold operation that located in the far east region of Russia. Despite the remote location and lack of infrastructure, high-grade ores and heap-leaching technology help this mine to produce gold at the lowest costs possible. Svetloye was Polymetal’s lowest cost operation in 2019, delivering a solid and stable set of operating results.

3. Olimpiada, Russia – $455/oz.

Olimpiada gold mine. Image from Polyus.

Located in one of Russia’s most prolific gold mining provinces, Olimpiada is largest gold mine in Russia, one of the largest gold mines on the globe, and Polyus’ largest operation. The mine began production in 1996 and currently accounts for over a half the Moscow-based company’s total gold output. The ore mined at the site is processed at three plants with a combined capacity of 13 million tonnes of ore annually. To treat Olimpiada’s sulphide ores, Polyus employs BIONORD, the Company’s proprietary bio-oxidation technology. AISC at Olimpiada decreased by 3% as an increase in TCC was fully offset by the lower sustaining capital expenditures.

4. Voro, Russia – $460/oz.

Voro gold mine
Voro gold mine. Source: Polymetal.

Voro is one of Polymetal’s very first key gold assets, acquired in 1998. The mine and processing facility is located in the Sverdlovsk region of Russia. The open-pit and heap leach operation started in 2000 and has another nine years of life. At Voro, AISC were US $460/oz in 2019, or 4% less year-on-year. The heap leach facility and CIP plant continued to deliver a stable performance in line with the mine plan despite moderate grade declines.

5. Kyzyl, Kazakhstan – $514/oz.

Kyzyl open pit gold mine, Kazakhstan. Source: Polymetal

The Kyzyl Project is located in north-eastern Kazakhstan in a traditional mining region with good infrastructure and easy access to grid power and the railway. Kyzyl is a world-class asset that was acquired by Polymetal in 2014 for a total of $618.5 million. With its large high-grade reserves and low capital intensity, the asset is currently the main source of medium-term growth and significant shareholder returns. Kyzyl’s AISC were at US$ 514/oz, significantly below Polymetal’s average and feasibility study levels and down 38% year-on-year, as the mine delivered in excess of its design capacity and planned grade during the period.

6. Blagodatnoye, Russia – $566/oz.

Blagodatnoye gold mine. Image: Polyus.

Located only 25 kilometres away from Polyus’ flagship operation, Olimpiada, Blagodatnoye is the Company’s second largest mine. Commissioned in July 2010, it boasts a processing capacity of 8 mln tonnes of ore per year, which makes it one of the largest ore processing plants in the Russian gold mining sector.

7. Pueblo Viejo, Dominican Republic – $592/oz.

Pueblo Viejo gold mine. Source: Barrick.

The Pueblo Viejo mine in the Dominican Republic is about 100 km northwest of the capital city of Santo Domingo. The mine is operated by the Pueblo Viejo Dominicana Corporation — a joint venture between Barrick (60%) and Newmont Goldcorp (40%). The Pueblo Viejo mine produced 0.983 million ounces of gold in 2019. For 2019, all-in sustaining costs per ounce decreased by 5% mainly reflecting lower minesite sustaining capital expenditures, partially offset by slightly higher total cash costs per ounce.

8. Kumtor, Kyrgyzstan – $598/oz.

Kumtor gold mine
Kumtor gold mine. Source: Centerra.

The Kumtor open pit mine, located in the Kyrgyz Republic, is one of the largest gold mines in Central Asia. It has been in production since 1997 and has produced over 12.6 million ounces of gold to December 31, 2019. All-in sustaining costs on a by-product basis per ounce sold, which excludes revenue-based tax, were $598 per ounce in 2019 compared to $694 per ounce in 2018. The decrease was mainly due to more ounces of gold sold and lower capitalized stripping as a result of the suspension of mining operations and earlier cessation of stripping activity in 2019 (cut-back 19) than in 2018 (cut-back 18).

9. Natalka, Russia – $605/oz.

Natalka gold mine
Natalka gold mine. Source: Polyus

Natalka is located in the Magadan Region on the northern Pacific coast of Russia, in one of the most remote and cold parts of the country. It is a major open-pit gold deposit which was discovered in 1942. Polyus acquired Natalka in 2008. The construction of a mining complex began in 2012, and active full-scale mining was launched in early 2013. However, mining and construction works at the mill were soon halted. Construction at Natalka restarted in 2016. Mining operations were relaunched in January 2017, and hot commissioning was successfully completed at the mill. Polyus fully ramped up production at Natalka in the second half of 2018.

10.Verninskoye, Russia – $636/oz.

Commissioned in December 2011, Verninskoye became Polyus third mine launched in three consecutive years from 2009 to 2011. Located in the historical gold mining area of Bodaybo, this greenfield operation’s resource base allows for expansion of its plant processing capacity.

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