Interesting article in today's Australian on how the way AISC is...

Interesting article in today's Australian on how the way AISC is used by gold miners can be misleading to investors. WGX gets a mention:

The all-in sustaining costs published by ASX-listed gold companies are largely bollocks, and any retail investor that relies on them is fooling themselves. Here’s one example from the current car-crash in the Australian gold sector.

Dacian Gold reported all-in sustaining costs (AISC) for the March quarter was $2008 an ounce, suggesting the company was getting a margin of some $600 an ounce. Then, on June 17, Dacian told shareholders it was planning to wind back production at its Mt Morgan gold hub – a clear indication that the gold price the company needs to stay afloat is well above current levels.

Here’s another: West Australian producer Westgold Resources gave its March AISC as $1759 an ounce, when its average received gold price was $2385. To the eye of any ordinary investor, that’s an average margin of $626 an ounce, on production of 65,426 ounces – $41m cash for the quarter on top of costs.

Westgold finished March with $189m in the bank, compared to $110m at the end of December. If the $97m raised from investors is removed, Westgold’s position actually went backwards by $18m. To be clear, there is no accusation of fraud or dodgy business at either company.

Comments anyone?