Newmont Goldcorp Sets 2020 Capital Guidance

Researched by Industrial Info Resources (Sugar Land, Texas)--Global gold miner Newmont Goldcorp Corporation (NYSE:NEM) (Denver, Colorado) has set its capital guidance at $1.55 billion for 2020 and its gold production guidance at 6.7 million ounces, the company said Monday. Industrial Info is tracking more than $9 billion in Newmont Goldcorp project activity.

Click on the image at right for a graph showing Newmont Goldcorp project activity by world region.

The company has earmarked $975 million for sustaining capital in 2020, and $575 million for development capital.

Development capital includes expenditures that are tied to Newmont Goldcorp's 38.5% ownership in the Nevada Gold Mines joint venture with Barrick Gold Corporation (NYSE:GOLD) (Toronto, Ontario), which was launched on July 1. Twenty-two mines and other facilities in Nevada are part of the combination, creating one of the largest mining complexes in the world.

With the joint venture, Newmont Goldcorp expects to see a production improvement of 180,000 ounces per year from its Nevada assets starting in 2023, along with a 25% improvement in costs over the next decade.

For more on the joint venture, see July 1, 2019, market brief - Barrick, Newmont Establish Nevada Gold Mining Joint Venture, and March 18, 2019, article - Barrick, Newmont Forge Ahead with Nevada Venture to Create World's Largest Gold Producer.

Development capital next year in North America also includes the Musselwhite Gold Mine winze materials handling system addition near Pickle Lake, Ontario. The project is aimed at increasing ore capacity by 20%, improving energy efficiency, reducing ventilation requirements and lowering mining costs. The Musselwhite mine is on track to reach full production in October 2020, said Newmont Goldcorp Chief Financial Officer Rob Atkinson during a Monday conference call with industry analysts. For more information, see Industrial Info's project report.

The project is part of Newmont's acquisition of Canada-based Goldcorp in early 2019. For more information on Newmont's $10 billion acquisition of Goldcorp, see January 15, 2019, article - Newmont Agrees to Acquire Goldcorp to Become Leading Global Gold Producer.

In Australia, development capital is earmarked for the Tanami Expansion 2 project in Australia, which would sustain and extend the mine's life beyond 2040 and expand the Tanami complex by constructing a new underground mine. The mine will be capable of producing more than 500,000 ounces of gold per year for several years, according to the company. WorleyParsons (North Sydney, Australia) is providing engineering, procurement, construction and management services for the project, which is now in preliminary engineering. For more information, see Industrial Info's project report.

Development capital also is targeted for Newmont Goldcorp's operations in Ghana. Click here for a list of the Ghana projects.

Longer term, annual sustaining capital through 2024 is expected to be between $900 million and $1.1 billion. Development capital is expected to be between $500 million and $600 million in 2021, and then ratchet down to $100 million or less in 2024.

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