AISC — all-in sustaining costs
What it costs to produce an ounce of gold and keep the operation running while doing so — expressed in US dollars per ounce sold.
The metric answers a question the bare production cost leaves open: at today's gold price, is anything left after the mine has spent the money it must spend in order to still be producing next year?
Where the number comes from
AISC is not an accounting measure. It appears in no IFRS standard. The World Gold Council introduced it in 2013 as a voluntary industry guideline and revised it in November 2018, because the figure customary until then — cash costs — looked systematically flattering: it omitted precisely the outlays without which a mine stands idle after five years.
Where the number sits determines who has checked it. It appears in the MD&A, the management discussion and analysis, and therefore outside the audited financial statements. The auditor reads the accounts, not the metric alongside them. The World Gold Council says nothing on the point either way; the consequence simply follows from where the figure is published.
What is in
| Item | Why |
|---|---|
| Mine operating costs | Extraction, processing, on-site labour |
| Royalties and licence fees | An unavoidable outflow |
| Sustaining capital expenditure | The whole point of the metric |
| Sustaining exploration | Replacing mined ounces within the existing operation |
| Sustaining leases | A line of its own since the 2018 version — a consequence of IFRS 16 |
| General and administrative costs | Allocated |
| Reclamation and remediation accretion | The periodic charge |
The leasing line is new and still often overlooked. Since IFRS 16, right-of-use assets sit on the balance sheet and the interest element of the lease payment lands in finance costs — where it would drop out of AISC. That is exactly what the World Gold Council corrected, explicitly. An excavator is an excavator, bought or leased.
What is deliberately left out
The guidance lists the exclusions by name: "Income taxes, Working capital, All financing charges (including capitalised interest), except for financing charges related to leasing arrangements, Costs related to business combinations…"
The clause after the comma is the point. Financing costs are excluded — those arising from lease arrangements are not. Anyone writing that AISC contains no interest expense as a matter of principle is reproducing the pre-2018 rule.
Otherwise, out of scope:
- Growth capital. A new mine, a second shaft, a doubling of the processing plant — none of it counts.
- Exploration spending on new deposits. Only sustaining exploration is included.
- Income taxes and movements in working capital.
- Costs arising from business combinations.
A company with a low AISC and heavy growth capital expenditure can still burn cash every year. AISC says nothing about the company's cash flow — only about the cash flow of the operating mine.
The ten per cent threshold
The line between sustaining and growth was, until 2018, a matter of judgement. Since then there has been a quantified test: an outlay counts as growth capital if it delivers a material benefit — and material means "at least a 10% increase in annual or life of mine production, net present value, or reserves".
For the first time the boundary can be checked. A company booking an expansion as growth has to show that it lifts annual production, present value or reserves by at least a tenth. Fall short and the spending belongs in AISC — pushing it up.
The latitude does not disappear; it merely moves. From the question of what the item is called to the question of which base the ten per cent is measured against. Both live in the small print of the footnotes, not in the press release.
By-products: where the latitude really sits
A gold mine that also produces copper has two revenue streams. The common account — that the company may choose freely between by-product and co-product accounting — falls short.
The World Gold Council prescribes that by-product revenues be credited as a reduction of costs. A negative AISC is therefore not a sleight of hand but a possible outcome of the prescribed method, where the copper revenue exceeds the cost of the gold ounce.
The real discretion lies in two other places:
- An additional AISC per metal is permitted. A company reporting one must disclose the allocation methodology — and splitting shared costs across two metals is an assumption, not a measurement.
- Local oversight of non-GAAP measures imposes limits of its own, and they differ by jurisdiction. A Canadian issuer, an Australian one and one listed on the NYSE are subject to three different regimes for the same voluntary metric.
That is where two companies cease to be comparable — not in the free choice of a method that does not, in fact, exist.
Where the metric misleads
AISC is an average across the year and across all mines. A group with one very good mine and one very poor one reports a middling figure that applies to neither. The number per mine is usually available only in the annual report.
It is tied to the exchange rate. Costs are incurred in Canadian dollars, Australian dollars or pesos; revenue comes in US dollars. A falling local currency lowers the reported AISC without anything having improved underground.
It is tied to the grade of the zone currently being mined. Spend a year mining the richest part of the deposit and the reported AISC will not hold for the remaining mine life. This is permitted, it is common, and it cannot be detected from the metric alone.
And: before first production it does not exist. What an explorer reports as "AISC" is an estimate drawn from a technical study — with the accuracy of that study stage. That accuracy is asymmetric: under the AACE 47R-11 cost classification, the range for an early-stage study runs from −20% to +100%. See PEA, PFS, FS.
How we use the figure
We always set AISC against the commodity price, not against the peer group: the difference is the margin per ounce, and it determines how much of a price fall the operation can absorb. Alongside it we state the reporting year, the treatment of by-products and, where available, the figure per mine rather than the group average.
Where the boundary between sustaining and growth has shifted from the previous year, we say so. An AISC that falls with no operating reason behind it usually has a reclassification as its cause.
The full framework is set out under How we value resource companies.
Sources
- Guidance Note on Non-GAAP Metrics — All-In Sustaining Costs and All-In Costs, World Gold Council, updated version of November 2018 (applicable from 1 January 2019) — gold.org
- Cost Estimate Classification System — As Applied in Engineering, Procurement, and Construction for the Mining and Mineral Processing Industries, AACE International Recommended Practice No. 47R-11 — web.aacei.org
Version 2 · 11 August 2026