G Mining hikes cost forecast on labour, royalties

AI desk brief

G Mining lifted full-year cost guidance sharply on labour inflation, higher royalties and a stronger Brazilian real, with cash costs now seen at $836-$965/oz sold versus $736-$865 previously and AISC at $1,330-$1,544/oz versus $1,230-$1,444. Management also raised its assumed gold price to $4,300/oz from $4,000, which increases royalty expense, while National Bank said the “+$100 per oz. cost guidance revision” overshadowed a Q2 earnings beat and pressured the stock 4.2% in Toronto.

Operationally, the company reiterated 2026 output of 160,000-190,000 oz and expects about 61% of annual production in H2 as Tocantinzinho moves into higher-grade mineralization. Q2 production rose 16% sequentially to 36,845 oz, sales were 37,439 oz, and realized price averaged $4,197/oz; first-half output of 68,691 oz was broadly in line with plan given lower-grade ore and waste stripping.

For the desk, the key read-through is that even high-price gold miners are seeing margin pressure from local FX, labour and royalty leverage, particularly in Brazil. Near-term catalysts are H2 production ramp, any further FX moves in BRL/USD, and progress updates on Oko West after the recent G2 acquisition; however, the direct gold-price signal is mixed because higher bullion prices support revenue but also mechanically raise royalties and the company’s reported cost base.