ML-Implode News - Data paint dire portrait of SA's gold producers

The companies are expected to table a counter offer that is below inflation, which was 5.6% in the May measure of consumer price inflation. Some analysts are expecting the gold companies to stick close to this measure, perhaps rising by two or three percentage points.
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The gold price is now R412,200/kg and closer to 60% of mines are in a loss-making or marginal position.

But the problems for the sector run far deeper than that, said SBG Securities gold analyst David Davis. Using the new cost reporting metrics proposed by the World Gold Council last month, the average all-in cost for the world's top five global gold mining companies was $1,467/oz in the first quarter of this year against the current spot price of $1,287/oz, Mr Davis said in a note on Friday.

By next year, about half of global production will need a break-even gold price of $2,400/oz, using a 10% year-on-year mining inflation assumption, he said.

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Data paint dire portrait of SA's gold producers