G Mining hikes cost forecast on labour, royalties

G Mining, a South America-focused gold producer, raised its cost forecast for the year due to factors such as labour-cost inflation and higher royalty payments. This led to a drop in the company's shares. The revised total cash costs are now estimated to be between $836 and $965 per ounce of gold sold, up from a previous range of $736 to $865.

All-in sustaining costs (AISC) have also been revised to $1,330 to $1,544 per ounce, compared to the previous range of $1,230 to $1,444. Despite these higher costs, G Mining reaffirmed its 2026 production target of 160,000 to 190,000 ounces of gold. About 61% of this annual production is expected in the second half of the year as mining advances into higher-grade mineralization at the Tocantinzinho mine in Brazil.

The company's acquisition of Guyana's G2 Goldfields, valued at C$3 billion, is expected to bring two adjacent gold projects under one roof, potentially delivering over 500,000 ounces of gold annually. G Mining's Brazilian real-to-U.S.-dollar assumption has been revised downward, and the assumed gold price has been increased, both contributing to the higher cost forecast. The company maintains a net cash position of $192.7 million despite its higher cost outlook.