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ABN AMRO BANK N.V GOLD MINE COST REPORT

The Gold Mine Cost Report is produced as part of a joint venture between ABN AMRO Bank N.V and VM Group in conjunction with Haliburton Mineral Services. It augments our other gold reports especially the Yellow Book and the Gold Hedging Report.

As a benchmark for comparing the fortunes of individual mining companies relative to each other, the cost curve is an important analytical tool for mine management themselves and their shareholders as well as for the banks, equity brokers and investors.

Accounting and the reporting of production costs can vary from company to company and for this reason it is vital to compare like with like.

This comparison requires not just in-depth analysis and attention to detail but an understanding of company accounts and accounting practices.

It is our intention to publish this quarterly Gold Mine Cost Report on an open access basis and as with all our work, we would welcome feedback and comments.

2010

• ABN AMRO/VM Group Gold Mine Cost Report - Q1 2011 | Press release

The June 2011 issue of the Gold Mine Cost Report, published by ABN AMRO Bank N.V. and VM Group Haliburton Mineral Services, examines the changes in gold mine production cash costs in Q1 2011. Growth in average gold mining cash costs rose by 1.8% on the quarter, to $620/oz. On a year-on-year basis, the average cash cost for gold mines escalated by 13%, from $551/oz in Q1 10. The average gold price in Q1 11 of $1,387/oz ensured gold miners continued to enjoy huge margins between the average cash cost of production and the gold price, with the difference nowhere more notable than in Latin America where it stood at $891/oz. Notably, since the weak US dollar has contributed to higher cash costs in gold producing countries, in North America the difference between the average cash cost and average gold price in Q1 2011 was $841/oz.

• ABN AMRO/VM Group Gold Mine Cost Report - Q4 2010 | Press release

The May 2011 issue of the Gold Mine Cost Report, published by ABN AMRO Bank N.V. and VM Group Haliburton Mineral Services, examines the changes in gold mine production cash costs in Q4 2010. Growth in average gold mining cash costs rose by 5.1%, to $616/oz, the largest quarter-on-quarter increase since Q1 10. On a year-on-year basis, the average cash cost for gold mines escalated by 19.2%, from $517/oz in Q4 09. The growth in year ago costs primarily reflects the weak US dollar, with average cash costs up sharply in every region apart from North America. The average gold price in Q4 10 of $1,368/oz ensured gold miners everywhere enjoyed the most profitable quarter on record, with the difference between the average gold price and the average cash cost a record $752/oz. Nowhere was this more apparent than in Latin America – the lowest cost region – where the difference between average costs and the average gold price was $884/oz.

• ABN AMRO/VM Group Gold Mine Cost Report - Q3 2010 | Press release

The November 2010 issue of the Gold Mine Cost Report, published by ABN AMRO Bank N.V. and VM Group Haliburton Mineral Services, examines the changes in gold mine production cash costs in Q3 2010. Growth in average gold mining cash costs rose by 4.1%, to $585/oz, the largest quarter-on-quarter increase since Q1 10. On a year-on-year basis, the average cash cost for gold mines escalated by 15.8%, from $504/oz in Q3 09. The growth in costs primarily reflects the weak US dollar, with average cash costs up in every region apart from North America. Increases in labour and power costs saw South Africa remain the most expensive gold producing region. However, the average gold price in Q3 10 of $1,227/oz ensured gold miners everywhere enjoyed the most profitable quarter on record, with the difference between the average gold price and the average cash cost a record $642/oz.

• ABN AMRO/VM Group Gold Mine Cost Report - Q2 2010 | Press release

The September 2010 issue of the Gold Mine Cost Report, published by ABN AMRO Bank N.V. and VM Group Haliburton Mineral Services, examines the changes in gold mine production cash costs in Q2 2010. In this issue, the report shows how growth in average gold mining cash costs slowed to 1.8%, to $558/oz, which was the smallest quarter-on-quarter increase since Q1 09. On a year-on-year basis, the average cash cost for gold mines escalated by 18.4%, from $471/oz in Q2 09, down from 21% in Q1 10 vs. Q1 09. This slowdown in cash costs marks a modest improvement in operating efficiencies in South Africa, Oceania and North America, which offset advances in Latin America and elsewhere. However, South African gold mine production remains much more expensive per ounce of gold than anywhere else, with upper 9th decile costs at $927/oz. This is unlikely to change in the foreseeable future.