Costs edge lower at Mexico's top gold mines

Production costs at Mexico's biggest gold mines edged lower in Q2, with grades and production among the key factors.

Cash costs across seven operations averaged US$537/oz, down from US$571/oz in the same period of 2017, according to BNamericas calculations.

Figures were from mines which produced over 40,000oz gold in the quarter and are on a by-product basis, where available. Averages are non-weighted.

While cash costs are likely to fluctuate as grades and production changes, Mexico's biggest gold mines are well placed to continue generating significant cash flows despite recent price declines.

Gold averaged US$1,198/oz in September, compared to US$1,332/oz in January.

LOWEST COST

1. Peñasquito: Cash costs: negative US$269/oz

Goldcorp's Mexican asset was in a class of its own in Q2, with cash costs declining to negative US$269/oz gold from positive US$26/oz.

Higher by-product credits were among the reasons for the fall, which came despite lower gold sales. The Zacatecas state mine is a major silver, lead and zinc producer, as well as being among Mexico's top gold mines.

2. Herradura: US$365/oz

Fresnillo's biggest gold mine saw cash costs dip from US$484/oz on higher grades and an increase in gold inventories on leaching pads, partly offset by higher mining costs.

MEDIUM COST

3. Pinos Altos: US$608/oz

Agnico Eagle Mines' flagship Mexican operation was the third lowest-cost gold mine in the quarter despite a substantial increase in cash costs, from US$373/oz.

Costs rose as a result of lower gold production, the timing of unsold inventory and higher underground mining costs.

4. El Limón-Guajes: US$680/oz

Cash costs at Torex Gold's Mexican mine declined from US$706/oz, as throughput continued to ramp up.

HIGHER COST

5. Noche Buena: US$773/oz

Fresnillo saw cash costs decline from US$804/oz at its Noche Buena operation due to higher gold grades and lower cost per ton.

6. Mulatos: US$795/oz

Cash costs at Alamos Gold's Sonora state mine increased by US$60 due to lower grades.

7. Los Filos: US$804/oz

Leagold Mining's Guerrero state mine saw cash costs dip from US$871oz in 2Q17, despite lower gold volumes sold.