production costs

Over the years I visited Chris Cairns at the IGR offices many times. He would give me a detailed briefing on IGR and then spend time talking about the gold industry in general. One point he consistently made was that many miners, particularly UG miners, used a cash cost basis for cost per ounce, which he denounced as not actually showing true costs. He named several examples of companies and warned that what they were saying was necessarily what was accurate. (I don't remember him naming SLR.) Below was in today's Australian and I wonder how this would impact on the gold mining sector if it became standard practice?

"NORTH American gold giant Goldcorp has become the latest major company to overhaul the way it reports its production costs, in a move that will intensify the debate over the gold industry's transparency.
Goldcorp announced it would now report "all-in" production costs, rather than the "cash cost" reported by the vast majority of goldminers in Australia and around the world.
The company said its all-in cash cost would probably be between $US1000 ($948) and $US1100 an ounce, compared to its current cash costs of $US525-$575 an ounce.
Goldcorp said the move to the new measure provided a "more complete picture of industry profitability to stakeholders", with the conventional cash cost measure failing to capture expenses that are key to a miner's profitability.
Cash costs generally exclude charges such as taxes, royalty, depreciation, exploration and development, all of which can eat into a company's profitability significantly."

"Bill Beament, the managing director of Perth-based goldminer Northern Star Resources, which also reports all-in production costs, said there was increasing pressure from investors around the world for more thorough reporting of production costs. "The industry has to change and make sure they're very transparent around how they report costs," Mr Beament said."

"One, investors are getting the wrong impression, and they're working that out now well and truly. And second, Canberra thinks the industry makes $1000 an ounce in gold, which is absolutely totally ludicrous. Unless we pick our socks up and start demonstrating that (true cost), we're a big fat target for potential increases in royalties or tax."

So, here is a successful mining MD telling us we've been dudded by most companies for quite a while.