Reviewed by Gotrade Internal Analyst
All-in sustaining cost (AISC) is the mining industry's standard measure for how much it costs to produce an ounce of gold or silver.
For investors evaluating gold mining stocks, AISC reveals which companies can remain profitable across different price environments and which are vulnerable when metal prices decline.
What Is AISC?
AISC stands for all-in sustaining cost. It was introduced by the World Gold Council in 2013 to provide a more complete picture of mining costs than previous metrics like cash cost per ounce.
Cash cost only captured direct production expenses like mining, processing, and refining. AISC addresses this by including the full range of costs required to sustain current production levels, reported on a per-ounce basis for easy comparison against spot prices.
When a company reports AISC of $1,250 per ounce and gold trades at $2,000, the difference represents the operating margin available for debt repayment, exploration, dividends, and corporate overhead.
Components of AISC
AISC captures several layers of cost that together represent what it takes to sustain a mine's output year after year.
Direct production costs
Mining, milling, processing, and on-site administration. These form the base of any cost calculation and are most directly affected by ore grade, labor rates, and energy prices.
Sustaining capital expenditure
Ongoing investment to maintain equipment, extend underground development, and replace depleted reserves. This keeps current operations running but does not include spending on new projects or expansions.
Corporate and general costs
Head office expenses, regulatory compliance, insurance, and management compensation.
These overhead costs can be significant for companies operating multiple mine sites across different jurisdictions.
Reclamation and remediation
Environmental obligations that accumulate over a mine's life, including provision for eventual mine closure and land restoration.
One category AISC deliberately excludes is growth capital: spending on new mines, major expansions, or acquisitions. AISC reflects the cost of maintaining current production, not growing it.
Why AISC Matters for Mining Stocks
For investors, AISC is the single most important cost metric when evaluating mining companies. It directly determines how much profit a miner generates at any given metal price.
- A company with low AISC has a wider margin between costs and revenue. This provides resilience during downturns, supports consistent dividends, and reduces dependence on external financing.
- A company with high AISC operates with a thin margin. Even modest price declines can push it toward breakeven, increasing the risk of dividend cuts or dilutive share issuances during unfavorable market cycles.
AISC also reveals management quality. Two mines with similar geology can report very different AISC depending on operational efficiency and capital discipline.
Declining AISC over time signals strong execution, while rising AISC may indicate aging assets or poor cost control.
Comparing AISC Across Companies
AISC comparisons are most useful within the same metal and similar operating contexts. Several factors influence where a company falls on the cost curve.
Geography and jurisdiction
Miners in regions with lower labor costs and established infrastructure tend to report lower AISC. Companies operating in remote or politically unstable regions face higher costs due to logistics, security, and regulatory complexity.
Ore grade and mine type
Higher ore grades mean more metal per ton of rock, which lowers per-ounce costs significantly. Open-pit mines generally have lower AISC than underground operations because of higher throughput.
Scale of operations
Larger producers benefit from economies of scale. Fixed costs are spread across more ounces, reducing per-unit cost. Single-mine companies lack this advantage and typically report higher AISC.
Look at AISC trends over multiple quarters rather than a single report. One-time disruptions can distort individual quarters, so the trajectory matters more than any single data point.
AISC and Gold Price Relationship
The relationship between AISC and gold prices determines the profitability of the entire mining sector.
- When gold prices rise well above industry-average AISC, miners generate expanding margins. This is where operating leverage becomes powerful: a $200 increase in gold prices flows almost entirely to the bottom line because AISC remains relatively stable short-term. Mining stocks often outperform gold itself during these periods.
- When gold prices fall toward industry-average AISC, margins compress rapidly. High-cost producers become unprofitable first. Low-cost producers survive but see reduced cash flow. This is where the distinction between senior and junior miners becomes most apparent.
- When gold trades significantly above AISC for extended periods, it triggers supply responses. Higher margins incentivize new mine development, eventually moderating price gains through longer commodity supercycles.
AISC is not static. Rising energy costs, wage inflation, and declining ore grades can push AISC higher industry-wide.
Tracking AISC trends alongside gold prices and interest rate cycles gives investors a more complete view of mining sector health.
Conclusion
AISC is the essential cost metric for evaluating precious metals miners. It captures the full cost of sustaining current production and allows direct comparison against metal prices to assess profitability.
Low-AISC miners offer resilience and margin expansion potential, while high-AISC operators carry more risk during downturns. Comparing AISC across companies, tracking trends over time, and understanding the cost-price relationship gives investors a practical framework for analyzing this cyclical sector.
FAQ
What does AISC stand for in mining?
AISC stands for all-in sustaining cost. It measures the total cost per ounce of producing gold or silver, including direct mining costs, sustaining capital, and corporate overhead.
What is a good AISC for a gold miner?
Generally, AISC below $1,200 per ounce is considered low-cost. However, "good" AISC depends on current gold prices and how the figure compares to industry peers.
Does AISC include the cost of building new mines?
No. AISC only covers costs to sustain existing production. Growth capital for new projects is excluded and reported separately.
References
- World Gold Council, All-in sustaining costs and all-in costs, 2013.
- Quoted Data, All-In Sustaining Costs (AISC), 2026.
