The costs of mining are customarily
divided into cash and total costs. The cash costs are the regular working costs
of the mine. The definition varies between companies and may include smelting,
refining and any by-product
benefit but generally excludes taxes, exploration,
depreciation, depletion
expenses and financing. Thus the cash costs are a benchmark only of a mine’s viability
over the short term. The
total costs, embracing the other items, reflect what a mine must achieve to sustain
profitability over a long period and to ensure shareholders a dividend. Worldwide
the average cash costs per ounce were $176
and total costs $228 in 2001. The
gold mining industry is adopting a standard definition of costs drawn up by The
Gold Institute.
|
| Production:
Standard Costs Definition |
| (Insert
relevant cost of each mine) |
|
|
.
|
|
|
|
|
Direct
mining expenses
|
xxx |
|
Stripping
and mine development adjustments
|
xxx |
|
Third-party
smelting, refining and transport costs
|
xxx |
|
By-product
credits (deduct)
|
(xxx) |
|
Other
|
xxx |
|
| Total
cash operating costs |
|
|
|
.
.((b)
|
.
.
|
|
|
.
.
|
|
Royalties
|
xxx |
|
Production
taxes
|
xxx |
|
| Total
cash costs (a) + (b) |
|
|
| .
|
.
|
|
|
|
Depreciation
|
xxx |
|
Depletion/amortization
|
xxx |
|
Reclamation
and mine closure
|
xxx |
|
| Total
production costs (a) + (b) + (c) |
|
|