With the gold price trading under $1150 per ounce gold miners are cutting dividends, making redundancies, closing mines and halting exploration in order to survive.

According to Citi Bank analysts 75% of all gold mining companies have an all in cost of production of $1,200 per ounce. All in cost includes exploration, head office, interest and salary costs. If the price persists under $1,200 per ounce, gold miners may be forced to restructure their debt or face having their finance withdrawn. Highly leveraged producers may have to hedge future production or dilute shareholders equity. Gold mining shares are significantly more volatile than the metal itself.

Gold mining shares have performed poorly throughout 2013 and 2014.