The idea here is to get a handle on which junior mining company is running a tight ship and keeping G&A costs tight in Q3, as well as seeing which junior mining company was taking the piss with its G&A and spending way too much of your money on its own extravagances. Therefore the following:
- We pick a bunch of juniors, mostly goldies but a few silver mining companies too.
- We take the gold or gold equivalent ounce production total for each one (and in the case of the silver miners, we convert silver to gold equivalent ounces at 70:1).
- We check out the quarterly G&A figure as posted by each company.
- We do the math.
- We also add in a couple of majors as a guideline, to show what the bigger boy companies typically run as a ounce-per-G&A ratio. The examples are Kinross (K) and Barrick (ABX), and their results are typical of the majors’ sector.
So here’s the chart:
Rio Alto (RIO.to) (RIOM) comes in very low due to some specific factors for 3q14, but it typically a low ratio for all its quarters and wouldn’t get over $30/oz normally.
Endeavour Mining (EDV.to) is clearly efficient in its offices, good job done.
The majors’ type average is around $55/oz to $65/oz, so any junior which emulates that level is doing well. Endeavour Silver (EDR.to) (EXK)and Richmont Mines (RIC.to) qualify, Lake Shore Gold (LSG.to) at a pinch).
The acceptable limit? Let’s say $100/oz.
Argonaut (AR.to) isn’t shy about spending money in its offices, apparently.
Gold Resource Corp (GORO) is a joke.
PS: What, the table? Yeah sure, here you go:
Ticker | 3q14 G&A ($m) | Oz Au or AuEq prod | $ G&A/oz |
RIO | 0.777 | 56368 | 13.78 |
EDV | 4.12 | 117612 | 35.03 |
KGC | 38.2 | 701088 | 54.49 |
EDR | 2.165 | 37465 | 57.79 |
ABX | 98 | 1650000 | 59.39 |
RIC | 1.578 | 23187 | 68.06 |
LSG | 3.281 | 45600 | 71.95 |
FVI | 3.467 | 35520 | 97.61 |
GPR | 1.289 | 12285 | 104.92 |
TGD | 3.062 | 26671 | 114.81 |
FR | 5.27 | 41073 | 128.31 |
AR | 3.334 | 22980 | 145.08 |
GORO | 4.361 | 17262 | 252.64 |
in case of silver mines, conversion to AuEq done at 70/1 |