All-in Sustaining Costs (AISC)
Also: AISC, All-in costs, Total production costs
All-in Sustaining Costs (AISC) are a standardised metric of the gold-mining industry that captures all the costs required to maintain a mine's current production capacity on an ongoing basis.
The All-in Sustaining Costs (AISC) were introduced in 2013 by the World Gold Council to standardise the previously inconsistent cost reporting of the gold-mining industry. In contrast to the older concept of "cash costs", which captured only direct operating costs, the AISC are intended to provide a realistic picture of the actual economic burden per troy ounce produced.
What Counts Towards the AISC?
Building on the cash costs, the AISC add further cost blocks that are indispensable for the sustainable operation of a mine:
- Cash costs – direct mining, processing and refining costs
- Sustaining capital expenditure (capex) – investment to maintain existing production capacity (e.g. replacement equipment, infrastructure)
- Exploration and development costs at existing mines
- General and administrative costs (G&A) at corporate level
- Royalty and levy costs, insofar as not already included in cash costs
Growth investment in new mining areas or new mines is expressly not part of the AISC – for that, the broader "All-in Costs (AIC)" metric exists.
Formula (Simplified)
AISC (USD/oz) = Cash costs + Sustaining capex + Exploration (sustaining)
+ G&A + Royalties (if not already included)
÷ Troy ounces produced
Why Are AISC Relevant to Investors?
The current gold price compared with a mine's AISC shows its operating margin: if the spot price is well above the AISC, the mine operates profitably and can repay debt or pay dividends. If the gold price falls below the AISC, production cuts or mine consolidations threaten – which in the medium term influences global supply and demand in the precious metals market and acts as an indirect price support.
The historical gold prices show that phases of strongly compressed margins — such as 2013–2015, when the gold price fell from around 1,700 USD to below 1,100 USD and reached or exceeded the AISC of many high-cost producers — regularly led to production throttling and subsequent price recoveries.
Limits of the Metric
AISC are not a GAAP figure and are calculated slightly differently by each company. Investors should check the composition in the annual report. AISC also do not account for growth capex, acquisition costs or financing costs – for a complete company analysis these must be considered in addition. (Not investment advice.)
In Brief
AISC is the most important profitability metric for gold mines: it shows from which spot price a mine can extract sustainably and economically – and thus how far the market price is from the structural cost floor.