AISC in Mining: All-In Sustaining Costs Explained

Quick Answer

AISC (All-In Sustaining Cost) is the most important mining profitability metric. Formula: AISC = (Cash Costs + Sustaining Capex + G&A + Sustaining Exploration − By-product Credits) / Production Volume. For gold miners: AISC below $1,200/oz = excellent; $1,200–$1,500/oz = average; above $1,800/oz = marginal at current gold prices. The gold price minus AISC = margin per ounce → directly drives free cashflow and dividends. Example in portfolio: Fresnillo AISC ~$17/oz silver (primary silver miner, among lowest-cost globally). BHP copper AISC ~$1.80/lb vs copper price ~$4.50/lb = 150% margin. Low AISC = dividend durability through commodity cycles.

Marco Bozem

Investor & Analyst | Mining, Hard Assets, Dividends | MB Capital Strategies

Marco analyzes mining companies using AISC as a primary filter for dividend safety. All analysis from public earnings reports and independent research. Not investment advice.

AISC and Dividend Sustainability in Mining

For dividend investors, AISC is directly linked to dividend safety. Mining companies with a large margin between the commodity price and their AISC can maintain — and often grow — their dividends through commodity price downturns. Those operating near their AISC are one bad quarter away from a cut.

Most dividend-paying miners use one of two structures:

• Fixed-plus-variable dividends: A base dividend set conservatively (often at 40–50% of FCF at median commodity prices) plus a variable top-up when margins expand. Agnico Eagle, B2Gold, and many mid-tier gold miners use this model. The base is protected; the variable disappears when margins compress.
• Percentage-of-FCF payout: The company commits to paying out a defined percentage (often 50–75%) of free cash flow as dividends. This means AISC and commodity prices jointly determine how much you receive. Thungela Resources and Warrior Met Coal have operated this way in coal; several gold streamers use similar frameworks.

In both cases, AISC is the denominator. Higher AISC relative to the commodity price means less FCF available for distribution. When I screen mining companies for dividend quality, AISC margin (commodity price minus AISC) is the first filter, before looking at yield, payout ratio, or management credibility.

AISC for Silver, Uranium, and Thermal Coal

AISC is widely used in gold and increasingly standardized in other commodities, but the calculation method varies:

• Silver: Primary silver producers report AISC per ounce of silver equivalent. The by-product credit methodology is critical here — a silver miner with significant gold and zinc by-products can report negative or near-zero net AISC while a primary silver producer with few by-products shows $18–$22/oz. Always read the footnotes on by-product assumptions.
• Uranium: Uranium miners typically report costs per pound of U3O8. AISC-equivalent metrics vary by producer. Cameco and Kazatomprom report cash costs and unit operating costs; the industry does not yet have a universal AISC standard comparable to gold. Compare break-even costs at current spot prices ($80–$90/lb U3O8 range in 2025–2026).
• Thermal and metallurgical coal: Coal miners report FOB mine cost per metric tonne. Thungela Resources (South Africa), Coronado Global Resources (Australia/USA), and Arch Resources operate in the $80–$130/t cost range for export coal, with revenue sensitivity to Newcastle and seaborne met coal prices. AISC-style analysis applies: wide margins fund dividends, compressed margins threaten them.
• Copper: As noted, copper AISC is per pound and depends heavily on by-product accounting. Net copper AISC for a mine with significant molybdenum credits can look misleadingly low. Southern Copper (Grupo Mexico) reports some of the lowest net copper costs globally due to by-product revenue from silver and molybdenum.

AISC Red Flags: What to Watch in Earnings Reports

Mining companies report AISC in their quarterly results. Here are the warning signs I look for:

1. AISC rising faster than commodity prices: If gold is up 10% year-over-year but a miner's AISC is up 12%, their margin is actually shrinking despite the higher price. This often precedes dividend guidance cuts.
2. Guidance increases mid-year: When a miner raises its AISC guidance during the year (e.g. from $1,200 to $1,350/oz), it usually reflects operational problems — lower ore grades, equipment failures, labor disputes, or permitting delays. Treat upward AISC revisions as yellow flags.
3. Sustaining capex cuts: Companies can temporarily suppress reported AISC by deferring sustaining capex. This improves short-term margins but accelerates mine degradation and future cost inflation. Look at sustaining capex as a percentage of revenue over time — a shrinking ratio is a warning sign.
4. Currency tailwinds masking real cost problems: Miners operating in weaker-currency countries (South Africa, Canada, Australia) can show flat dollar-denominated AISC even while local currency costs are rising. A strengthening ZAR, CAD, or AUD will immediately expose the underlying cost pressure in dollar terms.
5. Grade decline not offset by expansion: As mines mature, ore grades typically decline — meaning more rock must be processed per ounce of gold recovered. Rising AISC from grade decline is structural and usually cannot be reversed without drilling new higher-grade zones or acquiring new assets.

How to Build an AISC Comparison Table

When I analyze mining sector positions, I build a simple AISC comparison table for each commodity I hold. For gold (as of Q1 2026 based on latest public reports):

This table immediately shows which companies have the most dividend headroom at current gold prices and which are most vulnerable to a gold price correction. If gold dropped to $2,400/oz, Newmont's margin would compress to ~$920/oz while B2Gold's would still be ~$1,350/oz. That difference compounds into very different FCF and dividend outcomes.

Not investment advice — always verify AISC figures from company press releases and earnings supplementals before making investment decisions. AISC methodology can vary; standardization has improved but is not universal across all miners and all commodities.