Newmont issues new 2020 guidance, lowers capex
S-based gold major Newmont has issued a new production guidance for 2020, as it began ramping up operations at four sites that were previously placed in care-and-maintenance.
CEO Tom Palmer reported in a media statement on May 19 that 13 sites of Newmont’s14 operating mines and joint ventures would be fully operational in the “coming weeks”.
The only operation that remains suspended is the Musselwhite mine, in northern Ontario, Canada. The company idled operations at Musselwhite on March 23 to prevent the possible transmission of the coronavirus to the nearby First Nation communities. Newmont said it would agree a safe restart plan with First Nations.
Assuming that operations would continue throughout the remainder of the year without major interruptions, the miner expects 2020 attributable production of 6-million ounces, down from the previous guidance of 6.4-million ounces.
“The revised 2020 outlook includes the production and cost impacts from our five operations temporarily placed into care-and-maintenance for an average of 45 days. The second quarter is expected to be the lowest production and highest cost quarter of 2020 as the sites ramp up from care and maintenance,” the company stated.
Meanwhile, Newmont continued to progress the majority of its development and sustaining capital projects, including Tanami Expansion 2, in Australia, developing the sub-level shrinkage mining method at Subika Underground, in Ghana, and advancing laybacks at Australia’s Boddington and Ghana’s Ahafo.
However, as a result of Covid-19, total 2020 capital expenditure (capex) is now expected to be about $1.3-billion, owing to reductions in non-essential activities and changes to the development capital schedule for Tanami Expansion 2 and Boddington’s Autonomous Haulage, which defers some expenditures to 2021.
The gold major lowered its attributable sustaining capex guidance from $950-million to $775-million, and reduced the development capex budget from $575-million to $450-million.
For exploration and advanced projects, about 80% of Newmont’s exploration budget wasallocated to near-mine with the majority of work suspended in March. However, near-mine drilling programmes are being ramped up and greenfields activities in French Guiana, Suriname, Ethiopia, Peru, Chile and Australia would resume “as soon as local restrictions are lifted”.
The exploration teams have been working remotely focused on improving orebody and district scale models, as well as developing risk mitigation plans to restart activities under Covid-19 restrictions. Advanced project study work for Yanacocha sulphides and Ahafo North continues remotely, Newmont said.