With gold prices falling over the past week, gold miners, including high-cost miner IAMGOLD Corp (IAG 0.55%), are feeling the pressure. If gold prices remain low, how serious is the situation for IAMGOLD?

IAMGOLD's costs of business
IAMGOLD reported first quarter all-in sustaining costs of $1,198 per ounce and has guided for $1,150 to $1,250 an ounce for 2014, which, at the high end, is close to where gold prices currently sit. It managed to reduce all-in sustaining costs by $92 an ounce over the same quarter last year; however, the average realized gold price was approximately $350 an ounce more in the first quarter last year. For the first quarter of 2014, IAMGOLD reported paltry earnings of $3.7 million on revenues of $279.3 million. 

While these numbers are scary, more disturbing for investors is the fact that cash at the end of the first quarter of 2014 was $139.9 million compared to $648 million at the end of the first quarter of 2013. Net cash from operating activities for the first quarter of 2014 was $28.1 million, down from $99.5 million from the same prior year period. With IAMGOLD making less money, and with its treasury being depleted, a continued prolonged period of low or lower gold prices will continue to hurt the company's bottom line.

IAMGOLD is making some progress on cost-cutting as it is projecting 2014 capital expenditures of $400 million, which is a reduction of approximately 40% from 2013. It does have $750 million in available credit, which means it shouldn't have to issue any debt or raise money through the equity markets, but one way or another, in order to increase cash flow, it looks like gold prices are going to need to rise, or IAMGOLD is going to need to reduce spending much further.

Successful transition for AngloGold Ashanti
In comparison to IAMGOLD, AngloGold Ashanti (AU 0.55%) has managed to transform itself from one of the higher cost producers to middle of the pack status. AngloGold Ashanti managed to reduce all-in sustaining costs from $1,275 per ounce in the first quarter of 2013 to $993 per ounce in the first quarter this year on lower capital expenditures and cash costs. AngloGold Ashanti is guiding for all-in sustaining costs of $1,025 to $1,075 an ounce for 2014. Part of the reason for its success is due to the increased production as its new low-cost Kibali and Tropicana mines continue to ramp up. The Kibali mine, which is jointly owned by Randgold Resources, produced 51,000 ounces of gold at low all-in sustaining costs of $572 an ounce while Tropicana produced 84,000 ounces at all-in sustaining costs of $694 an ounce. 

Cash flows from operating activities were steady at $350 million compared to $356 million from the first quarter last year. One concern for investors is debt, as AngloGold Ashanti has net debt of $3.1 billion as of the end of the first quarter, which is a substantial amount. AngloGold Ashanti will be reducing costs and for 2014 capital expenditures are anticipated to be $1.35 billion to $1.45 billion, compared with $1.99 billion in 2013.

Foolish takeaway
Something has to change in order for IAMGOLD to increase profitability and cash flow. While the company has been able to cut expenditures and reduce all-in sustaining costs somewhat, with the current price of gold barely above costs, IAMGOLD is likely to continue to only tread water in the near future. Further cost-cutting would be a welcome sign for investors, but more likely only a rise in the price of gold will boost this stock. AngloGold Ashanti has done a good job of transforming itself into a mid-cost producer, and in doing such, has enabled the company to generate reasonable cash flows.