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Researched by Industrial Info Resources (Sugar Land, Texas)--Newmont Corporation (NYSE:NEM) (Greenwood Village, CO), known as the world's leading gold miner, announced on May 5 its first-quarter net income was $822 million, compared with $87 million the year prior -- a roughly 844% increase -- largely due to surging gold prices and its acquisition of Goldcorp in early 2019.
On March 6, gold prices sat at a then- seven-year high of $1,684 per ounce due to save-haven buying. As COVID-19 continued to turn into a wide-reaching economic crisis, investors ditched stocks for less volatile investments such as gold. Although prices tumbled in mid-March, a disruption like that of many other financial/investment markets, they have since rebounded. The spot price reached another a new seven-year-high of $1,739 per ounce on April 14. With that said, Newmont's average realized price for gold in the first quarter was $1,591, which is an increase of $291 per ounce from first-quarter 2019.
But it is Newmont's early 2019 acquisition of Goldcorp that largely accounts for the drastic earnings boost from the year prior. The purchase added mostly North American assets to Newmont's then-existing ones throughout the globe, and not just gold. The company is now also mining silver, copper and zinc, but gold remains king -- attributable production increased 20% to 1.5 million ounces for the quarter as a result of the new assets; that production brought in a 43% revenue increase from first-quarter 2019. Armed with new avenues for cash flow, 2020 capex is $328 million, an increase of 46% from the year prior. For more information on the acquisition, see January 15, 2019, article -- Newmont Agrees to Acquire Goldcorp to Become Leading Global Gold Producer. For more information on Newmont's 2020 capex, see December 3, 2019, article -- Newmont Goldcorp Sets 2020 Capital Guidance.
Click here for a list of active Newmont Corporation projects.
Chief Financial Officer Nancy Buese did acknowledge some naturally adverse effects of COVID-19, but pointed to market factors, including gold prices, to quell any doubts about the company's standing.
"With gold prices currently around $1,700 per ounce and favorable oil prices and foreign exchange rates, these tailwinds will more than offset any short-term disruptions, as we manage through these challenging times," she said.
Industrial Info is tracking 30 active projects worldwide, worth $8.26 billion, that are attributed to Newmont.
Click on the image at right for a graph showing Newmont's active project spend, by country.
On its first-quarter earnings call, Newmont executives pointed investors to two main profit-driving projects in 2020: First, a Stage 2 expansion of its Tanami complex in Australia will extend the mine life to 2040 by adding a 1,460-meter shaft; construction is scheduled to kick off in June, but early site preparation work has already begun. Completion is scheduled for June 2024. And a $64 million materials handling system addition at its Musselwhite mine in Ontario, Canada, will reduce ventilation costs and increase ore capacity by 20%. Construction is about 90% complete and is set to finish in June. For more information, see Industrial Info's reports on the Tanami Stage 2 and Musselwhite projects.
The biggest active project by total investment, which accounts for over half of the whole spend, is Newmont subsidiary Minera Yanacocha SRL's $4.8 million Minas Conga grassroot copper-gold mine in Peru. The open-pit mine will produce 750,000 ounces per year of gold and 95,000 tons per year of copper over a 19-year mine life; kickoff is scheduled for June 2024, with completion in December 2026. For more information, see Industrial Info's project report.
In addition, Newmont is also looking toward high-dollar projects that once belonged to Goldcorp. Currently in its drilling and exploration phase, a $297 million Dawson grassroot gold mine and heap leach process in Vancouver, British Columbia is set for kickoff in April 2023, with completion in March 2025. With another subsidiary, Newmont is planning a $250 million Cripple Creek and Victor gold mine addition in Colorado. The addition will provide access to higher-grade gold ores, which will extend the mine life beyond 2027. Kickoff is scheduled for April 2028, with completion in April 2030. For more information, see Industrial Info's project reports on the Dawson and Cripple Creek projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
On March 6, gold prices sat at a then- seven-year high of $1,684 per ounce due to save-haven buying. As COVID-19 continued to turn into a wide-reaching economic crisis, investors ditched stocks for less volatile investments such as gold. Although prices tumbled in mid-March, a disruption like that of many other financial/investment markets, they have since rebounded. The spot price reached another a new seven-year-high of $1,739 per ounce on April 14. With that said, Newmont's average realized price for gold in the first quarter was $1,591, which is an increase of $291 per ounce from first-quarter 2019.
But it is Newmont's early 2019 acquisition of Goldcorp that largely accounts for the drastic earnings boost from the year prior. The purchase added mostly North American assets to Newmont's then-existing ones throughout the globe, and not just gold. The company is now also mining silver, copper and zinc, but gold remains king -- attributable production increased 20% to 1.5 million ounces for the quarter as a result of the new assets; that production brought in a 43% revenue increase from first-quarter 2019. Armed with new avenues for cash flow, 2020 capex is $328 million, an increase of 46% from the year prior. For more information on the acquisition, see January 15, 2019, article -- Newmont Agrees to Acquire Goldcorp to Become Leading Global Gold Producer. For more information on Newmont's 2020 capex, see December 3, 2019, article -- Newmont Goldcorp Sets 2020 Capital Guidance.
Click here for a list of active Newmont Corporation projects.
Chief Financial Officer Nancy Buese did acknowledge some naturally adverse effects of COVID-19, but pointed to market factors, including gold prices, to quell any doubts about the company's standing.
"With gold prices currently around $1,700 per ounce and favorable oil prices and foreign exchange rates, these tailwinds will more than offset any short-term disruptions, as we manage through these challenging times," she said.
Industrial Info is tracking 30 active projects worldwide, worth $8.26 billion, that are attributed to Newmont.
Click on the image at right for a graph showing Newmont's active project spend, by country.On its first-quarter earnings call, Newmont executives pointed investors to two main profit-driving projects in 2020: First, a Stage 2 expansion of its Tanami complex in Australia will extend the mine life to 2040 by adding a 1,460-meter shaft; construction is scheduled to kick off in June, but early site preparation work has already begun. Completion is scheduled for June 2024. And a $64 million materials handling system addition at its Musselwhite mine in Ontario, Canada, will reduce ventilation costs and increase ore capacity by 20%. Construction is about 90% complete and is set to finish in June. For more information, see Industrial Info's reports on the Tanami Stage 2 and Musselwhite projects.
The biggest active project by total investment, which accounts for over half of the whole spend, is Newmont subsidiary Minera Yanacocha SRL's $4.8 million Minas Conga grassroot copper-gold mine in Peru. The open-pit mine will produce 750,000 ounces per year of gold and 95,000 tons per year of copper over a 19-year mine life; kickoff is scheduled for June 2024, with completion in December 2026. For more information, see Industrial Info's project report.
In addition, Newmont is also looking toward high-dollar projects that once belonged to Goldcorp. Currently in its drilling and exploration phase, a $297 million Dawson grassroot gold mine and heap leach process in Vancouver, British Columbia is set for kickoff in April 2023, with completion in March 2025. With another subsidiary, Newmont is planning a $250 million Cripple Creek and Victor gold mine addition in Colorado. The addition will provide access to higher-grade gold ores, which will extend the mine life beyond 2027. Kickoff is scheduled for April 2028, with completion in April 2030. For more information, see Industrial Info's project reports on the Dawson and Cripple Creek projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
