What Is a Good AISC? How to Judge Gold Mining Costs

The Short Answer Is “It Depends”

Asking whether a gold miner’s AISC is good is like asking whether a house price is reasonable: you need to know the neighbourhood, the condition, and what comparable properties sell for. A ~$1,413/oz AISC that looks excellent today would have been mediocre in 2019 when the industry median sat below $1,050/oz.

Quartile position and context do most of the heavy lifting. The sections below show how to read a reported AISC without treating it as a pass/fail score.

Quartile Positioning Matters More Than Absolutes

The cost curve shifts every year. What stays constant is that first-quartile producers outperform through commodity cycles while fourth-quartile mines close.

As of 2025-2026, the approximate quartile boundaries are:

These ranges reset as input costs change, but the relative positioning is the point. A mine sitting in Q1 for five consecutive years has structural advantages (grade, scale, jurisdiction) that are hard to replicate. A mine that bounces between Q2 and Q4 is probably managing its reported AISC through capex timing rather than genuine efficiency.

Five Context Factors That Change the Answer

1. Gold price and margin safety

AISC only means something relative to the gold price. With gold near $4,500/oz, even a $1,700/oz producer generates enormous margins, and so does the most expensive mine in the industry. That is the trap: at today’s price the cost curve separates nobody.

So subtract AISC from a stress-case gold price rather than spot, and pick one low enough to bite. A conservative long-run assumption of $3,500/oz, roughly 20% below spot, still leaves a fourth-quartile mine at $1,982/oz with more than $1,500/oz of margin. Even a repeat of gold’s 2013 fall, about 30%, would put the price near $3,100 and leave that same mine over $1,100/oz ahead. The level where cost position starts to decide anything is nearer $2,000/oz, roughly where gold sat before the 2024-25 run: there a fourth-quartile producer is at break-even, a third-quartile mine is marginal, and only first-quartile costs leave a comfortable margin.

2. Reserve life and production trajectory

A mine with $1,000/oz AISC and 3 years of remaining reserves is not the same as one with $1,300/oz AISC and 15 years of mine life. The first is cheaper per ounce today but offers almost no duration. The second is more expensive but delivers a decade of cash flows.

Short reserve life also tends to push AISC higher over time as the mine depletes its best ore and moves into lower-grade zones. What looks like low-cost today can deteriorate quickly if there is no reserve replacement pipeline.

3. Mine type and stage

Open-pit mines in their first five years of operation typically report the lowest AISC because equipment is new, grades are high (miners usually start with the best ore), and infrastructure costs are amortised over large production volumes. Underground mines run higher because of ventilation, ground support, and slower ore extraction rates.

Comparing a young open-pit operation to a mature underground mine on AISC alone is misleading. The underground mine might have 20 years of reserve life and lower geological risk, while the open-pit is burning through its best ore.

4. Jurisdiction

Labour costs, energy costs, royalty regimes, and logistics all vary by country. A mine in the Democratic Republic of Congo with $1,200/oz AISC carries risks (political, security, infrastructure) that a Canadian mine at $1,400/oz does not. Discount rates should reflect this, and so should your interpretation of AISC.

5. By-product credits

Polymetallic mines subtract copper, silver, or zinc revenue from their gold AISC. A gold-copper mine might report $900/oz AISC after copper credits. If copper drops 30%, that AISC jumps to $1,200/oz overnight. Always check what commodity price assumptions underpin the by-product credits and how sensitive the AISC is to movements in those prices.

Three Traps to Avoid

Trap 1: treating low AISC as a buy signal. AISC measures cost efficiency, not investment quality. A mine can report a low cost per ounce and still be a poor equity when reserves are depleting, there is no replacement pipeline, or jurisdiction risk is high. Use AISC in the model; do not let it settle the investment call.

Trap 2: ignoring the trend. A mine whose AISC has risen from $1,100/oz to $1,500/oz over three years is telling you something, whether the driver is grade decline, ageing equipment, or catch-up sustaining capital. The current number matters less than the direction. Check the 3-year AISC trajectory, not just the latest quarter.

Trap 3: comparing across mine types. An open-pit heap-leach operation in Nevada will always report lower AISC than a deep underground mine in South Africa. Comparing them directly is meaningless. Compare within peer groups: large open-pit producers against each other, mid-tier underground operators against each other. The benchmarks page groups producers to make this easier.

A Practical Checklist

When evaluating whether a miner’s AISC is “good enough”:

1. Where does it sit on the cost curve? First or second quartile is the minimum for most institutional investors.
2. Stress-test gold at $3,500/oz, then at a price low enough to bite, near $2,000/oz. A producer that is cash-flow negative at $2,000 is a bet on the cycle holding.
3. Is AISC trending up or down over 3 years? Rising AISC erodes margins even if gold prices hold.
4. How much reserve life remains? Low AISC with short mine life is a wasting asset.
5. Are by-product credits material? If they are, stress-test them at lower base metal prices.
6. Is sustaining capex realistic? Compare to peers. Abnormally low sustaining capex now means higher AISC later.

For the full cost component breakdown, see AISC vs cash cost. For how AISC feeds into DCF and NAV models, the worked examples in the Mining Sector Primer walk through the mechanics step by step.