National Post reports with higher oil prices, open-pit mining is becoming very expensive and harder to be profitable.

Investors got a good reminder of that fact this week from a small miner called GBS Gold International Inc. The stock lost two-thirds of its value after the company raised its cost guidance and warned that it may have to lower production following a review of its operations.

Andrew Kaip, Haywood Securities analyst wrote:

“With ongoing operational issues at Brocks Creek eroding cash and bullion levels to $11-million from $17.5-million at the end of Q2, we believe GBS will require additional financing to execute its development strategy.”

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