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Newmont Goldcorp Expects Nevada Production Of 1.9 Million Ounces In 2019

DENVER, CO - Newmont Goldcorp Corporation Chief Executive Officer Gary J. Goldberg said, “Our joint venture in Nevada will generate synergies and create the world’s largest gold mining complex, and our combination with Goldcorp will create the world’s leading gold business as measured by assets, prospects and people. North America production is expected to be 1.9 million ounces in 2019 as higher grade production from Nevada operations: Northwest Exodus and Twin Underground are offset by the depletion of Silverstar ore at Carlin and lower gold production at Phoenix as mining shifts to higher copper grade ore from the Bonanza pit. Production remains at 1.9 million ounces in 2020 and 2021 as higher grades at Long Canyon following the stripping campaign help offset lower grades at CC&V.
The Company delivered $349 million in free cash flow in the quarter while meeting production and cost targets on the back of continued operational excellence. This performance gave us the means to deliver superior shareholder value in the form of a special dividend, and to build a stronger future by advancing profitable projects on three continents, and by progressing two historic transactions.”
The Company entered into an implementation agreement with Barrick Gold Corporation to establish a joint venture that will combine certain mining operations and assets located in Nevada and historically included in the Company’s North America reportable segment and certain of Barrick’s Nevada mining operations and assets (the Nevada JV Agreement). Pursuant to the terms of the Nevada JV Agreement, Barrick and the Company will hold economic interests in the joint venture equal to 61.5 percent and 38.5 percent, respectively. Barrick will operate the joint venture with overall management responsibility and will be subject to the supervision and direction of the joint venture’s Board of Managers, which will be comprised of three managers appointed by Barrick and two managers appointed by Newmont. The Company and Barrick will have an equal number of representatives on the joint venture’s technical, finance and exploration advisory committees. Establishment of the joint venture is subject to the usual conditions, including regulatory approvals, and is expected to be completed in the coming months. Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life.
The Company reported its 2019 and longer-term outlook. The outlook reflects steady gold production and ongoing investment in its operating assets and most promising growth prospects. Attributable gold production is expected to be 5.2 million ounces in 2019, primarily driven by a full year of higher grade production from the recently completed Subika Underground project in Africa. Production is expected to be 4.9 million ounces in 2020 and longer-term production is expected to remain stable at between 4.4 and 4.9 million ounces per year through 2023 excluding development projects which have yet to be approved.
South America production is expected to be 650,000 ounces in 2019 as productivity improvements at Merian offset the transition to harder ore. Production is expected to decrease to 560,000 ounces in 2020 and 450,000 ounces in 2021 as the Tapado Oeste pit and Yanacocha laybacks are mined out and Merian transitions from saprolite to hard rock. The Company continues to advance near-mine growth opportunities at Merian and both oxide and sulfide potential at Yanacocha.
Australia production is expected to be 1.5 million ounces in 2019 with higher grades and throughput and productivity gains at Tanami, offset by lower mining rates at KCGM following the wall slips and the continuation of stripping at Boddington. Production is expected to be 1.5 million ounces in 2020 and 1.6 million ounces in 2021 as Boddington accesses higher grade ore. KCGM’s near-term production has been lowered due to the wall slips, but optimization work continues to recover the impacted ounces as part of the broader Golden Mile Growth Study. The Company continues to advance studies for a second expansion at Tanami and expects to reach a full-funds decision in the second half of 2019.
Africa production is expected to be 1.1 million ounces in 2019 with a full year of production from Subika Underground, higher grades from the Subika open pit and improved mill throughput in the second half of the year with the Ahafo Mill Expansion. Production is expected to be 930,000 ounces in 2020 with lower grades at Akyem and Subika open pit which are partially offset by higher underground grades at Ahafo and a full year of production from the Ahafo Mill Expansion. In 2021, production is expected to be 1 million ounces as Akyem reaches higher grades near the bottom of the pit. The company continues to advance the Ahafo North project and other prospective surface and underground opportunities.
Gold cost outlook – CAS is expected to be $710 per ounce for 2019 following higher production at Ahafo, lower mining costs at Yanacocha and lower operational costs at Tanami with the completion of the Tanami Power Project. The Company continues to implement Full Potential cost and efficiency improvements and advance technology initiatives to offset inflation and input cost pressures. CAS is expected to be $750 per ounce for 2020 and between $690 and $740 per ounce longer-term through 2023. AISC is expected to be $935 per ounce in 2019 on improved CAS in Africa and South America partially offset by higher sustaining capital. AISC is expected to be $975 per ounce in 2020 and between $875 and $975 longer-term through 2023. Future Full Potential savings and profitable ounces from projects that are not yet approved represent additional upside not currently captured in guidance.
Attributable gold production increased two percent to 1.23 million ounces primarily due to a full quarter of mining at Subika Underground and higher grade at Merian and Yanacocha, partially offset by reduced mining and lower grade at KCGM. Attributable copper production decreased 17 percent to 10,000 tonnes for the quarter, primarily due to lower grades and throughput at Boddington, partially offset by higher grades at Phoenix. Copper CAS totaled $43 million for the quarter. Copper CAS was $1.94 per pound, an 11 percent increase over the prior year quarter due to lower production at Boddington, partially offset by higher production at Phoenix and a favorable Australian dollar foreign currency exchange rate. Copper AISC for the quarter rosenine percent to $2.26 per pound primarily from higher CAS per pound.
Attributable Copper production is expected to be 45,000 tonnes in 2019 and 2020 as Phoenix reaches higher grade copper ore from the Bonanza pit which is offset by lower production at Boddington. Copper production increases to between 45,000 and 65,000 tonnes longer-term through 2023 driven primarily from higher grades at Boddington following completion of the next stripping campaign. CAS is expected to rise to $2.05 per pound in 2019 and $2.10 per pound in 2020 due to higher stripping at Boddington. CAS is expected to improve to $1.55 to $1.75 per pound longer-term through 2023 as production at
Newmont Goldcorp is the world’s leading gold company and a producer of copper, silver, zinc and lead. The Company’s portfolio of assets, prospects is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont Goldcorp was founded in 1921 and has been publicly traded since 1925.
The company’s address is 6363 South Fiddler’s Green Circle, Suite 800, Greenwood Village, CO 80111, (303) 863-7414, www.newmont.com.