Rusoro Mining Lowering Costs

One of the biggest stories of the gold mining sector over the last five years has been the relentless rise in production costs. The price of oil, steel, and other commodities has gone up as much or more in percentage terms as the price of gold.

However, over the last few months we have heard many industry analysts and newsletter writers speak to how they expect costs for gold producers to DROP now the global recession has hit.

One of the first companies to really show that trend is Rusoro Mining (RML-TSX; CAD$0.66). They are now one of the lowest cost producers in the junior and intermediate mining space, and have reduced cash costs by well over 50%.

Surprisingly, they now compare favourably with the best of their peer group. Very few mid-tier or junior gold companies get under $400 per ounce now:



I say it’s surprising because most investors can’t see or hear anything good that comes out of Venezuela, due to the shrill speeches of President Hugo Chavez. The reality is however, it hosts one of the largest goldfields in the world. And as Rusoro is showing, as the sole private miner in the country, these goldfields can be very profitable when managed properly.

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