NEW YORK (AP) -- The cost of producing gold should peak this year and moderate for some gold producers next year as they open new mines, a Stifel Nicolaus analyst said Friday.
Kinross Gold Corp. and Newmont Mining Corp. lack short-term opportunities to increase production so their costs will remain "stubbornly high," analyst George Topping said. Costs should fall for Barrick Gold Corp. and Goldcorp Corp.
Topping based his estimates on a formula to calculate what he called "real total cost per ounce." It includes expenses such as general and administrative, exploration, net interest and taxes as well as capital expenditures.
Mining companies have been pressured as gold prices have dropped 11 percent since February because traders have become concerned about the slowing global economy. That means the companies earn less revenue from gold sales. Gold for August delivery ended at $1,592 per ounce Friday.
Newmont, which is based in Denver, said in April its Akyem project in Ghana is expected to begin production in 2014. Kinross, based in Toronto, Ontario, Canada, is proceeding with an expansion project at a mine in Mauritania.
Barrick, which is based in Toronto, is close to starting production at the Pueblo Viejo mine in the Dominican Republic and the Pascua Lama mine on the border of Chile and Argentina.
Goldcorp, based in Vancouver, British Columbia, is a partner in the Pueblo Viejo mine. It is close to beginning production at the Cerro Negro mine in Argentina.
However, the Vancouver, British Columbia, company this week lowered its 2012 production guidance because of operational problems at two mines. Goldcorp forecast full-year gold production in a range between 2.35 million ounces and 2.45 million ounces. That compared with its previous 2012 forecast of 2.6 million ounces.
In afternoon trading Friday, shares of Kinross rose 49 cents, or 6.1 percent, to $8.53; Newmont gained 65 cents, or 1.4 percent, to $46.11; Barrick was up 22 cents at $34.78; and Goldcorp increased 82 cents, or 2.5 percent, to $33.90.
