Ann: Quarterly Activities Report September 2014, page-28

Ninja,

I agree! I decided some time ago that in order to get the best 'apples to apples' comparisons I would use a formula based on Net Cash Generated from Operations, Sold oz and average realised gold price over the period to give me a standadised figure for their costs that I could use across all mining companies.

Cash flow is much more difficult to mess with in the accounts. So although it is not specifically either Cash Costs or AISC, the number I come up with is usually very close to the AISCs reported by the very large miners. It gets a bit tricky when there are lots of bi-metal credits as I have to convert everything to AuEq oz or AgEq oz if the company is a primary silver miner. And there are still some miners reporting their operational numbers in Imperial rather than Metric - which is a real pain. But I feel it is worth it if I can get everything onto a level playing field.

It is only a small part of my overall analysis because I still garner data from the Income Statement, Cash Flow Statements, Financial Position Statements and from the Equity Statements, all of which then allow me to generate ratios to help with valuation comparisons. Like everything else, one has to view the entire picture rather than just focusing on costs.

Then there is the important area of Operations itself - which needs much careful assessment and a degree of 'crystal ball gazing' - but one could write an entire book about that!
CPDLC