It seems that a lot of the gold producers are turning towards this measure to define and report their costs more accurately. Goldcorp has now switched to reporting this way and the World Gold Council has been lobbying for this to become the standard. Barrick Gold and Yamana Gold has also started using this metric. Teck must be using this as part of their evaluation process.
This measure is calculated by adding up the capex, sustaining capital, exploration costs, operating costs and reclamation costs. This grand total is then divided by the number of ounces of gold, or in the case of copper, lbs.
Doing the actual math is where I fall apart. I have tried to work this out with a couple of people, but I don't want to include their calculations so they can chime in if they like.
Here are mine, which are no doubt flawed:
capex, $3,256 M
sustaining capex, $1,240 M
Exploration $??? Teck might use the multiple of our qualified expenses $85 M, or we might use all the funds that we spent, so $426 M
Operating Costs $LOM--I had $1,019 billion here taken from the FS, this number is flawed
Total Costs $??
Total divided by copper lbs. Then try it by lbs in RE and if we could salvage some or all of that 171Mt.
Has anyone got any experience with this calculation?
