Gold producers had their most profitable year ever in 2020, based on one metric. The average all-in sustaining cost (AISC) margin, which is the gold price minus the cost to produce the metal, hit a record $828 per ounce, according to Metals Focus. What this means is that for every ounce of gold a mining company produced in 2020, it got to pocket $828 on average. This is comfortably higher than the previous record of $666 set in 2011.

gold miners achieved record high margins in 2020
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The price of gold hit a record high of $2,070 in 2020, which helped increase revenues. But companies have also been focused on cost discipline. We didn’t see gold miners’ exploration budgets increase significantly in 2020, due in part to the pandemic, which forced mine closures in China, South Africa, Peru, Mexico and elsewhere.

Exploration spending in the goldfield rose about 1.2% from 2019 levels, to end at $4.34 billion. This came even as total nonferrous exploration budgets slipped to $8.3 billion, down 11% from the previous year, according to CPM Group data.

higher gold prices have not resulted in increased exploration spending
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The producer with the world’s lowest cost per ounce in 2020 was Polyus, according to Kitco News. The Russian miner’s AISC was only $604/oz. Among other companies in the top 10 were B2Gold ($788/oz), Centerra Gold ($799/oz), Kirkland Lake ($800/oz) and Polymetal ($874/oz).