Adequate estimation of equipment costs is a key factor in feasibility study and evaluation of design alternatives of mining projects. In this paper, capital and operation costs of backhoe loaders are estimated using multiple linear regression (MLR), based on principle component analysis (PCA). These cost functions are consisted of five independent variables; bucket size, digging depth, dump height, weight and horse power. The MLR is conducted in two steps. At the first correlation between independent variables is omitted using PCA technique. Thereafter, MLR functions are established using selected significant PCs and total cost functions are constituted as functions of initial variables. At the end, accuracy of functions are evaluated using mean absolute error rate method.