Thursday, July 21, 2011

Cost remains a big issue amid a $US1600oz gold price

Cost remains a big issue amid a $US1600oz gold price

THE gold sector's production "league ladders" are rather like those surveys on investment banks' deal-share, or newspaper circulation audits: they're open to interpretation and you'll never hear the last word on them.

In this cautious vein, we report Resolute Mining's (RSG, $1.35) claim that it will this year emerge as the second-biggest listed miner behind (undisputed) sector-titan Newcrest Mining (NCM, $40.96).

The Thai-centric Kingsgate Mining, the enlarged Alacer (the old Avoca) and the to-be merged Conquest Mining and Catalpa all have reasonable dibs on gold's silver medal status as well.

We guess no one should really care on who's bigger than who - most of us quit pissing contests after junior school - but the point is that output is ramping up to some serious numbers and economies of scale are emerging.

The even more pertinent point is whether the production will finally be reflected in some serious profits.

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