Since establishing formal guidelines in 2013, the World Gold Council’s (WGC) All-In Sustaining Cost (AISC) has been an important metric for comparing costs per payable metal unit sold for gold mining companies. However, it should not be a surprise that there are many interpretations of AISC, even with explicit WGC guidelines. While AISC is used by the investment community in ranking current producers, it is also often quoted by companies in valuations for mineral projects not yet in production. However, such technical-economic valuations using accepted best practices (as seen in NI 43-101 technical reports) are invariably in conflict with several aspects of the AISC guidelines. This presentation attempts to highlight the discrepancies between AISC guidelines and standard technical-economic valuations. To this end, for mineral project valuations not yet in production, SRK advocates a “Total Cash Cost” concept which reports costs per payable metal unit sold during life of mine commercial operations.
