| The cost of building a mine has increased significantly over the last decade, from US$560 per ounce of gold production capacity in 2004 to more than $2,300/oz last year, says a new report by SNL Metals & Mining. Based on data from mines currently under construction, capital costs are expected to peak this year at almost $2,400/oz, according to an article by SNL metals analyst Kevin Murphy.
“The three-year-running-average capital cost of capacity follows behind the trend set by the gold price,” said the SNL report, Strategies for Gold Reserves Replacement. “When gold prices increased sharply in 2006, producers responded by approving construction of more capital-intensive projects, which began at earlier gold prices.”..............................................Full Article: Source
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