If you look at a lot of gold companies, you would know that cost per ounce is variable and depends on many factors.  

When I bought GCM, I was looking ahead to the following:

1. Continued increases in production due to increased capacity at Segovia. Total production was up 10% in 2012  despite lower Q4 production due to power shortages that have been fixed.

2. Production is likely to increase to 120-130K oz in 2013.  Cash costs will drop as production increases.

3. New mill is coming, with 2500tpd capacity.  Company averaged less than 1,000tpd at Segovia in 2012 so capacity will more than double by 2014.  

4. After new mill and increased thru put, GCM is forecasting cash costs around $800/oz in 2014 or as much as 50% lower than recent cash costs.  


In addition to cash costs, there are many other ways to value a gold miner.  GCM has one of the lowest valuations for it's ounces in the ground.  It remains to be seen whether a giant open pit operation will ever be financed and built at Marmoto but 14million oz are there waiting.  Very little value is being given to Marmoto in the GCM market cap.  If gold continues to rise, Marmoto is a GIANT lotto ticket waiting to be cashed.