Despite higher prices and lower costs, world’s top producers scramble to get out of debt as output falls

 The box scores reveal the world’s top gold miners saw diminishing returns for ore mining and processing in 2016. This means on average they mined or milled more ore, but saw total gold output fall. Meanwhile prices rose and costs fell. Raw earnings and revenue increased, as did revenue from gold sales. Companies on one hand trumpeted these increases and reported hitting numbers, and on the other, raced to get out of debt. This picture is abstract, but represents the numbers that were reported by the companies in January and February. A summary of the numbers and the questions they raise follows.

Total Gold Output Down

Total gold output from the top 10 producers1 fell by an average of 1% year over year (yoy). If Polyus is removed, which upped their output by 12% yoy, average total gold output for the remaining nine falls 3% yoy. For the top five, output fell 4% yoy, while total ore processed increased 3% yoy. Based on their statements, such results were in line with company goals and forecasts. Top producer Barrick Gold reported that it “exceeded the company’s key targets for the year.” It processed 2% less gold yoy, but total gold output fell 10% yoy. Goldcorp reported that “full year 2016 gold production guidance was achieved.” The company processed 12% less ore yoy, but total gold output fell 17% yoy. At AngloGold Ashanti, total gold output fell 8% yoy, even though the company processed 5% more ore yoy. The company reported “production of 3.6 million ounces (oz) was within the original guidance for the year.”

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