Sustaining Capital Expenditures: Mining Maintenance vs Growth Capex

Sustaining capital expenditures are capital investments intended to maintain an existing mine's current operations or production capability rather than materially expand it.

In gold-mining analysis, sustaining capital is especially important because it is commonly included in All-In Sustaining Cost.

Common sustaining-capital items

Depending on the mine and issuer, sustaining capital can include:

• replacement mobile equipment;
• plant and infrastructure maintenance;
• underground mine development needed to maintain production;
• capitalized stripping that supports the current mine plan;
• tailings, water, or power infrastructure required for ongoing operations;
• sustaining exploration; and
• recurring major component replacements.

The exact classification is issuer-specific.

Sustaining capital versus growth capital

The core analytical distinction is:

1Sustaining Capital
2→ maintains current operations
3
4Growth / Non-Sustaining Capital
5→ builds new operations or materially expands existing ones

A major mill expansion, new shaft, greenfield mine, or project that materially increases production would generally be treated as growth or non-sustaining capital rather than sustaining capital.

But the boundary is not mechanical. Mine development can contain both sustaining and expansion elements.

Why classification matters for AISC

AISC typically includes sustaining capital while excluding major growth projects.

That means the classification directly affects the reported sustaining cost per ounce.

If an issuer classifies a large project as growth capital, the project may consume cash without appearing in AISC. Investors should therefore compare AISC with the full cash-flow statement and project disclosures rather than assuming AISC captures all capital spending.

Sustaining capital is not depreciation

Depreciation allocates historical capitalized asset cost through accounting earnings.

Sustaining capital is current or planned cash investment.

The two can differ substantially because:

• asset lives differ;
• inflation changes replacement cost;
• mine plans evolve;
• equipment replacement is lumpy; and
• prior growth projects can create future sustaining needs.

A mine with low depreciation can still require heavy sustaining capital, and vice versa.

Sustaining capital is not generic maintenance expense

Routine repairs and maintenance may be expensed through operating costs rather than capitalized.

Sustaining capital therefore captures only qualifying capital expenditures, not every expenditure required to keep the mine running.

That is one reason Total Cash Cost and sustaining capital should be analyzed together.

Capitalized stripping

Open-pit mines may capitalize certain waste-removal costs when the stripping activity provides access to future ore.

Those expenditures can be classified as sustaining or non-sustaining depending on the mine plan and issuer methodology.

This links sustaining capital to Strip Ratio, but the two are not the same metric: strip ratio is a physical waste-to-ore relationship, while sustaining capital is a financial classification.

Lumpy spending can distort annual comparisons

Sustaining capital can vary sharply year to year because of:

• major equipment replacement cycles;
• tailings projects;
• planned shutdowns;
• underground development timing;
• deferred maintenance; and
• mine-sequencing decisions.

A temporary decline in sustaining capital is not automatically evidence of structurally lower mine cost. It can reflect timing or deferral.

Filing examples

Newmont includes sustaining capital and lease-related costs in its AISC reconciliation. Barrick's reconciliation similarly includes sustaining capital expenditures and sustaining leases. Dakota Gold separately discloses initial capital, sustaining capital, and closure capital in project economics.

Sources:

• Newmont 2025 Annual Report
• Barrick Non-GAAP Reconciliation
• Dakota Gold 2025 Form 10-K
• World Gold Council Non-GAAP Metrics Guide

Bottom line

Sustaining capital is the capital spending required to support current operations under the issuer's classification. It is not all capex, not depreciation, and not every maintenance cost. Because it feeds directly into AISC, investors should inspect the sustaining-versus-growth boundary and the timing of large mine-development and replacement projects.

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