Lake Shore (TSX;LSG) said Thursday that its operating costs over the nine months ended Sept. 30 are estimated at US$588 per ounce sold, compared with the 2014 guidance range of between US$675 and US$775 per ounce, and 31 per cent below the US$856 recorded over the comparable period last year.
As with other gold miners, Lake Shore is grappling with a decline in gold prices. The spot price for bullion is currently about US$1,225 per share — roughly $100 below where it was a year ago and more than $500 lower than in October 2012.
"We are a low cost producer in our industry, which in the current price environment provides us with a significant advantage," Lake Shore president and CEO Tony Makuch said in a statement.
He added that Lake Shore's ability to generate free cash flow will position it to finance work to replenish its reserves while repaying debt and building its financial strength.
Its preliminary estimate for cash operating cost per ounce sold in the third quarter ended Sept. 30 is about US$595, including US$29 per ounce — a 15 per cent improvement from US$701 per ounced a year earlier.
The estimated all-in sustaining cost per ounce was US862 in the third quarter, which was better than the US$1,027 in the third quarter of 2013.
Total production costs in the third quarter are estimated at approximately C$30 million.3
Lake Shore's full financial results for the third quarter and nine months will be released Oct. 29, after markets close.Suggest a correction