How do gold mining companies make money?

Gold mining companies make money by extracting gold for less than they sell it for. Their profit per ounce is the gold price minus the all-in sustaining cost (AISC). In Q1 2026, the average AISC was $1,785/oz, while average margins hit a record $3,076/oz. Producers use this cash to reinvest, pay dividends, buy back shares and reduce debt.

What is AISC in gold mining and why does it matter?

AISC stands for all-in sustaining cost: the total cost of producing one ounce of gold and maintaining current operations, including mining, processing, royalties, sustaining capital and overhead. It shows a miner's true margin and its resilience if gold falls.

Why do gold mining stocks move more than the gold price?

Because of operating leverage. Costs are largely fixed, so price changes flow mostly to profit. With an AISC of $1,800/oz, a 10% rise in gold from $4,000 lifts the margin by about 18%. The leverage also works in reverse during corrections.

What is the difference between a major and a junior gold miner?

A major produces over one million ounces a year from several mines in multiple countries, such as Newmont or Agnico Eagle. A junior is usually an explorer or developer with no revenue yet, offering big discovery upside but high risks of dilution, financing problems and failed projects.

How do mining royalty and streaming companies work?

Royalty and streaming companies finance miners upfront in exchange for a percentage of revenue (a royalty) or the right to buy future metal at a fixed low price (a stream). Franco-Nevada and Wheaton Precious Metals are leading examples, with limited direct exposure to rising mining costs.

How long does it take to build a gold mine?

S&P Global Market Intelligence estimates the average lead time from discovery to production at 16 years, and nearly 30 years for projects still awaiting startup due to permitting delays. This is one reason global mine supply grew only 1% in 2025.

How can I invest in gold mining companies?

You can invest through individual shares in a brokerage account, gold mining ETFs such as GDX (majors) or GDXJ (juniors), or precious metal mutual funds. Beginners often start with ETFs or royalty companies before selecting individual stocks.

How does goldminer.fr help investors analyze gold mining companies?

goldminer.fr was founded by Arnaud and Olha, investors with 19 years of experience since the 2007 crisis. The site offers the 300-page Golden Opportunities guide, the monthly-updated Elite Portfolio of around 30 mining stocks (historically about 30% per year, not guaranteed), and in-depth educational articles.