With gold prices having experienced large declines during 2013, many gold producers are intent on reducing costs. While most have been at least somewhat successful, many have only been able to reduce costs enough to allow them to survive or remain marginally profitable. There are, however, a few gold producers with low productions costs that investors may still find attractive.

The companies
New Gold (NGD -0.47%) is a low-cost, intermediate gold producer with four operating mines. In 2013, New Gold's all-in sustaining costs were $899 per ounce, and for 2014 all-in sustaining costs are estimated at $815-835 per ounce. New Gold is projecting production of 380,000 to 400,000 ounces of gold in 2014, roughly the same as 2013, and copper production of 92-100 million pounds, which represents an increase of 12% copper production over 2013. New Gold's low cost New Afton mine is expected to average throughput of 12,500 tonnes per day in 2014, and plans are in place to proceed with mill expansion to 14,000 tonnes per day, which will increase gold and copper production growth in 2015.

New Gold has several interesting projects that investors should be aware of. El Morro is a joint venture gold-copper project in north-central Chile. New Gold owns 30%, with Goldcorp (GG) owning the remaining 70%. This is a great project for New Gold, as Goldcorp has agreed to fund 100% of the development capital for the project, which will be repaid by receiving an 80% share of cash flow once the project is in production until the development capital is repaid. New Gold also has the Rainy River and Blackwater projects in Canada, which have the potential to nearly triple annual gold production at low all-in sustaining costs. However, these projects have very large development capital costs, with the Blackwater project estimating development capital costs of nearly $1.9 billion inclusive of a $190 million contingency. Investors will want to keep a close eye on these projects, because if they move forward, New Gold will have to find a way to raise the large amount of capital required which likely would require either taking on significant debt or issuing equity.

Another low cost producer investors may want to consider is Alamos Gold (AGI 0.70%). Alamos Gold owns and operates the low-cost Mulatos mine in Mexico. For 2013, Alamos produced 190,000 ounces of gold at an estimated all-in sustaining cost of $800 per ounce. Investors should be aware that Alamos is projecting lower production in 2014 of between 150,000 to 170,000 ounces due to a decrease in grade and is projecting an all-in sustaining cost of $960-1,000 per ounce for 2014. Moving beyond 2014, Alamos anticipates mining higher grade ore and being able to reduce all-in sustaining costs. They are projecting achieving 200,000 ounces per year at Mulatos by 2016.

One of the most attractive things about Alamos Gold is its strong balance sheet with over $400 million in cash and no debt. With the current instability in gold prices, having a healthy balance sheet is very attractive for investors.

Final thoughts
With gold prices having decreased substantially from their all-time highs in 2011, many gold miners have had a difficult time trying to decrease production costs. Investors focusing on low-cost ounces rather than total ounces may want to consider companies like New Gold and Alamos Gold who have low all-in sustaining costs and have kept their spending under control so far. New Gold investors will want to watch the company closely to see how it manages its cash regarding its development projects. The key for Alamos Gold will be successfully mining higher grade ore that should allow it to reduce its all-in sustaining costs. If both these companies are successful in these key areas, they should be attractive low-cost producers with golden futures.