june act and cash flow out, page-22

"Mr Holland said rising energy, labour and production costs would virtually double costs in the next five years, and a gold price of close to $US2000 per ounce would be needed to keep pace."


This is the same old story being retold throughout the whole bull market. A few years ago it was a $1000 gold price that was needed, now its $2000.

The reality is that producer costs have been rising faster than the gold price.... which is the main reason why gold stocks have under-performed bullion itself, leading to excessive share dilution discussed previously.

What's crucial for a gold producer is to maintain their head grade... if they can do it they avoid the high capex needed to increase plant throughput just to maintain production levels.

If IGR can't maintain grade via underground, they have no choice but to increase plant capacity as open pit grades fall... this is a disease that afflicts the whole industry