The Financial Post reported that 2012 was a difficult year for gold miners, despite elevated prices, mostly due to escalating costs for everything from production to labour.
As quoted in the market report:
One significant factor has been the skyrocketing of miners’ costs. The costs of everything from energy to labour to engineering have risen faster than the price of gold. This has crimped the profit margins of the mining companies. In turn, investors have taken an axe to the value of the reserves being uncovered by exploration companies. For the junior companies, this has made it a difficult environment in which to raise capital since a weak equity environment for gold companies’ shares has made investors skittish to invest in these companies.