Lowest Cost Gold Mines in South America: Q1 2020 Overview

Newmont’s Merian mine in Suriname was the lowest cost gold operation in South America in Q1 2020.

In this report, Mines and Metals looked at costs at operating gold mines in South America in Q1 2020 using all-in sustaining costs (AISC) metric that serves as a globally accepted benchmark of a mine’s operating efficiency.

The ranking excludes privately-owned mines, tailings re-processing operations and mines where the precious metal is reported as a by-product.

Merian, Newmont’s gold mine in Suriname, tops the list of lowest cost gold mines in South America with AISC of $707/oz in Q1 2020. Merian’s AISC increased 23% y-o-y primarily due to lower ore grade mined and higher gold price-driven royalties, partially offset by lower sustaining capital spend.

Gold Fields Cerro Corona mine in Peru is second with AISC of $714/oz. All-in sustaining costs increased by 5 per cent due to higher cost of sales before amortisation and depreciation and lower equivalent ounces sold, partially offset by lower capital expenditure.

Jacobina mine owned by Yamana and located in Brazil, is third lowest-cost gold mine in South America with AISC of $760/oz achieved in Q1 2020. Jacobina’s costs of production and sales exceeded expectations in the first quarter of 2020, and were lower than in the first quarter of 2019. This was the result of record production in association with higher grade ore and increased throughput, and the positive impact as a result of the devaluation of the Brazilian Real compared to the US Dollar.

Pan American Silver’s Shahuindo mine in Peru is fourth with AISC of $775/oz in Q1 2020. AISC increased by 18% y-o-y primarily as a result of the increased sustaining capital per ounce.

Yamana’s El Penon mine in Chile sits fifth with $829/oz AISC in Q1 2020. First quarter AISC improved by 23% than in the comparative period, due to the positive impact of higher production, which resulted in fixed costs being divided over a larger number of ounces, as well as benefiting from the devaluation of the Chilean Peso during the period. In addition, cost saving initiatives undertaken during the prior year have begun to positively impact costs.

Sixth lowest cost gold mine in South America is Jaguar Mining’s Caete Mining Complex in Brazil. AISC for Q1 2020 ($875/oz) decreased by 29% as compared to Q1 2019 due to higher production.

At sitting seventh Gran Colombia Gold’s Segovia & Marmato Operations in Colombia, AISC averaged $890 per ounce in the first quarter of 2020, up 7% from $832 per ounce in the first quarter last year.

AISC at Austral Gold’s Guanaco/Amancaya mine in Chile in the March 2020 quarter were $893/oz, a 13% improvement compared to $1,027/oz during the March 2019 quarter.

With AISC of $908/oz achieved during Q1 2020, Lundin Gold’s new gigantic Fruta Del Norte mine in Ecuador is already ninth lowest cost mine in the region, despite its recent commissioning.

Equinox Gold’s Aurizona mine in Brazil is tenth lowest cost gold mine in South America. AISC of $952/oz in Q1 2020 have no comparable value y-o-y as commercial production achieved at Aurizona as of July 1, 2019.

The complete list is below.

Lowest Cost Gold Mines in South America: Q1 2020 Overview. Source: Mines and Metals.

MineCountryMajor owner / operatorQ1 2020 AISC, $/ozQ1 2019 AISC, $/oz% change
2Cerro CoronaPeruGold Fields7146775
4ShahuindoPeruPan American77565718
5El PenonChileYamana8291081-23
7Segovia&MarmatoColombiaGran Colombia8908327
8GuanacoChileAustral Gold8931027-13
9Fruta Del NorteEcuadorLundin Gold908n/an/a
10AurizonaBrazilEquinox Gold952n/an/a

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