Maybe gold has room to plunge a whole lot more? http://seekingalpha.com/article/2187273-new-gold-in-the-pipeline?ifp=0 .
Just to put it into perspective; Kibali Gold Mine has just expanded in the Democratic Republic of Congo to be one of the worlds biggest gold mines. Currently it is mostly open cut (the cheapest extraction method) and uses the cheapest labor on the planet (Africans) at a cost of US$464/oz, with a hedged price of US$1238 http://www.randgoldresources.com/randgold/content/en/randgold/randgold-kibali-update The article in the OP proposes that NGD can make money at US$850/oz. Their mines are located in high cost 1st world locations, and are expensive underground operations (with the exception of the old (pre-2008) heapleach ROM operation in Mexico) not counting the fact that according to their own website "Afton Mine" hasn't even started operations yet! http://www.newgold.com/properties/operations/default.aspx Meanwhile the spot price for Gold continues to fall and mainstream mines are closing their gates. and the sole "comment" on the article on the 'Alpha' site has come from a site 'contributor'.
As you would guess this sort of mine is in the small minority with credits for copper co-product that puts its AISC for gold in the negative $ per oz for one mine. There's at least one company on the ASX with a mine that can claim a similar result - Oceana Gold (OGC) http://stocknessmonster.com/news-item?S=OGC&E=ASX&N=405570 Philippines Q1 2014 Highlights: Didipio Mine: Record quarterly gold production of 30,480 ozs Gold Sales 36,264 ozs Copper Sales 7,752 tonnes Cash Cost (per ounce gold sold) was negative ($490) after Copper credit All-In Sustaining Costs (per ounce sold) was negative ($332) after Copper credit The New Zealand operations dragged the overall company result back: Overall Company cash costs of $170 per ounce sold All-In Sustaining (AISC) of $450 per ounces sold both net of by-product credits (I don't own any OGC)
while you are on Africa: http://www.mining.com/gold-mining-d...cas-second-largest-gold-producer-ghana-57050/ they(Ghana; second largest producer in Africa) were slashing production of 18% to cut cost Excerpt: In the third quarter of 2013, Ghana's output of the precious metal declined by 18% as weak prices forced some miners to cut production and costs, the Minerals Commission said, as reported by Bloomberg. "This is to be expected given the current price levels of gold," the CEO of the country's state-run mining regulator told Bloomberg. "There are implications for revenue as well as employment; companies have scaled down operations."
They're playing around with the costs. When gold goes up, they try to make costs look high as well. But see, if it drops, how "smart" they are - they can reduce them right away? I don't believe we will go sub-800 $, though, but it may go sub-1,000 $. Right now the Russian-Ukrainian crisis is pumping gold up, see it's almost 1,300 $ again.
Blackwater's AISC over the first 9 years is predicted to average US$685/ounce. Rainy River is predicted to be US$736/oz.
Besides dumping, there's also upwards speculation that might happen. Goldman Sachs and others will want to push prices up eventually and they can do so by seizing a good moment to break through resistance levels - in order to attract in more buyers. They'd gradually buy-up step-by-step and others will step in. But a good moment is necessary - like a major economic crisis (like euro crisis etc.).
