DENVER - (BUSINESS WIRE) - Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) announced today the Company continues to ramp up operations at Peñasquito, Cerro Negro, Éléonore and Yanacocha. Among Newmont’s 12 operating mines and two joint ventures, 13 sites will be fully operational in the coming weeks.
“We are pleased to be ramping up operations at our four sites previously placed in care and maintenance and we remain committed to protecting our workforce and neighboring communities,” said Tom Palmer, President and Chief Executive Officer. “We continue to respond to this pandemic from a position of strength and Newmont’s diverse portfolio in top-tier jurisdictions provides a long-term, stable production profile with the potential to generate significant free cash flow over time.”
Newmont is providing a revised 2020 outlook with nearly all of our mines operating and mining now deemed an essential activity in every jurisdiction where the Company operates. The revised 2020 outlook assumes that operations will continue throughout the remainder of the year without major interruptions. Newmont’s long-term guidance remains unchanged with stable production of more than 6 million ounces and improving costs from 2021 through 2024.
Newmont’s 2020 outlook is approximately 6.0 million ounces of attributable gold production which is near the lower end of the Company’s previous outlook. 2020 Costs applicable to sales (CAS) is expected to be $775 per ounce and All-in sustaining costs is expected to be $1,015 per ounce which were towards the upper range of the Company’s previous cost outlook. 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.
OPERATIONS UPDATE
Peñasquito: On April 12th, the operation was placed into care and maintenance to comply with the government of Mexico’s decree mandating the temporary suspension of all non-essential activities. Peñasquito began to ramp up activities on May 18th with a phased approach consistent with the Mexican government’s regulations. Over the next two weeks, the site will implement required hygiene protocols and mobilize key operations and maintenance teams for training. Production is expected to commence in early June.
Éléonore: On March 23rd, the operation was placed into care and maintenance after consultation with the local First Nation communities in an effort to mitigate the risk of transmission of the virus to the remote northern communities and to comply with the Quebec government’s restriction on non-essential travel within the province. The Quebec government lifted restrictions on April 13th and Newmont commenced engagement with the Cree First Nation Grand Council and the Cree Health Board to determine an acceptable path forward to protect its workforce and communities. In early May, Éléonore began ramping-up operations and the mill is expected to restart on May 23rd. The updated outlook includes the ongoing impact of expected travel and logistical constraints required to comply with local regulations and protect community health, as well as ongoing geotechnical work.
Cerro Negro: On March 23rd, the operation was placed into care and maintenance due to travel restrictions imposed by the Argentinian government.Essential personnel remained on site to maintain infrastructure, provide security and continue environmental management and ground control activities. In early May, the operation began implementing a safe restart plan and remobilizing its workforce and the mill is expected to start on May 20th. As the operation ramps up, a key focus area remains the improvement of operational standards in development, ground control and backfill practices. The updated outlook includes the ongoing impact of expected productivity challenges as a result of travel and other restrictions.
Yanacocha: On March 17th, the operation safely ramped down in response to travel restrictions imposed by the Peruvian government. Limited personnel remained on-site to perform essential work, including security, water treatment, environmental protection, and gold production continued from leach pads. In early May, the operation began remobilizing following the confirmation that the Peru Economic reactivation plan allowed surface mining. The site is implementing a safe restart plan with milling operations starting on May 16th and surface mining activities expected to begin by the end of May.
Musselwhite: On March 23rd, Newmont decided to place the operation into care and maintenance in order to limit the number of people on site and prevent the possible transmission of the virus into the nearby First Nations communities in northern Ontario. Essential personnel continue to maintain infrastructure, provide security and continue environmental management. Musselwhite is the only operation remaining in care and maintenance. Once a safe restart plan is agreed with the First Nation communities, conveyor installation is expected to recommence over the coming weeks.
Newmont continues to progress the majority of its development and sustaining capital projects, including Tanami Expansion 2, developing the sub-level shrinkage mining method at Subika Underground and advancing laybacks at Boddington and Ahafo. However, as a result of COVID-19, total 2020 capital expenditure is now expected to be approximately $1.3 billion due 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.
For exploration and advanced projects, approximately 80 percent of the Company’s exploration budget is allocated to near-mine with the majority of work suspended in March. However, Newmont is currently ramping up near-mine drilling programs and preparing to restart Greenfields activities as soon as local restrictions are lifted in French Guiana, Suriname, Ethiopia, Peru, Chile and Australia. 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 Sulfides and Ahafo North continues remotely.
Newmont will continue to utilize protective measures for its workforce and neighboring communities, including screening, physical distancing, deep cleaning, and avoiding exposure for at-risk individuals. If at any point the Company determines that continuing operations poses an increased risk to our workforce or host communities, it will reduce operational activities up to and including care and maintenance and management of critical environmental systems.
More information on Newmont’s proactive efforts to protect its people, neighboring communities and business may be found here.
About Newmont
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. The Company’s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution and technical proficiency. Newmont was founded in 1921 and has been publicly traded since 1925.
