Gold firms plan drastic cuts to stay afloat as bullion sinks

jueves 6 de noviembre de 2014 08:25 GYT

* Bullion hovers near 4-1/2 year low

* Low metal price to spur mergers and acquisitions

* Deep cost cuts now could hit gold output in medium-term

By Silvia Antonioli and Nicole Mordant

LONDON/VANCOUVER Nov 6 (Reuters) - Struggling gold producers plan increasingly drastic measures such as scrapping dividends, cutting jobs, halting projects and shutting mines to survive the latest price plunge, but not all of them will make it.

Gold tumbled to a more than four-year low of $1,137.40 an ounce this week, rekindling memories of last year's 28 percent drop to $1,196. That fall put an abrupt end to years of over-spending on expansion projects and forced producers to cut costs.

Gold prices recovered early in 2014, but the slide in the past three months to new lows will force companies to step up their efforts to cope.

According to Citi analysts, about three quarters of gold mining companies burn cash at spot prices just below $1,200 on an all-in cost basis, which includes head office, interest, permitting and exploration costs.

Buenaventura, Medusa and Iamgold are among the highest-cost producers with all-in costs well above $1,300, a Citi note to investors said.   Continuación...