I'm no expert and my analysis is rudimentary at best but as far as I understand you are right in the regard that it becomes exceedingly more difficult / expensive to continue to mine with age. However, if the price of gold was not high enough to support the cost of production, the mine would go offline. Companies also have the ability to set a predetermined price on their product for a period of time in the future. This happens independent of what market price of that metal will be when it is actually mined (look at what TGB did with copper last year). Some of the larger companies are making boat loads of money right now but yes their mines are getting older....In order to maintain production levels / level of profit you often see the bigs acquiring smaller mines (ala KGC, PAAS, and so on this past year alone). Again if this wasn't a profitable move why would they go about doing it in the first place?