Engineering & Mining Journal

MAY 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 25 of 83

GOLD MINERS ROUNDUP 24 E&MJ • MAY 2019 Despite the fact that gold prices rose for the fourth year in a row in 2018, total gold output by top pure play gold miners fell 5% year-over-year (yoy). It was the third year in a row that pro- duction fell. Meanwhile, the miners, generally speaking, processed a bit more ore to get those lower production numbers, and saw costs creep higher for the fourth straight year. It further fueled the theory that world gold production, at least for most of the top miners, is cresting. The trend appears to be behind two mergers, among the biggest in mining history, that occurred late last year and early this year. Those mergers temporarily pushed news from the industry to prime- time audiences. The backstory is found in the numbers from the two miners' investor reports. Simply put, they are logging declining pro- duction, almost across the board, at their biggest mines. After a couple of years of aggressively nixing debt, they made hard moves to buy a competitor, pump up re- serves, pacify shareholders, and muscle into the inside lane for the next few laps. The box scores from a pantheon of top producers 1 , ranked by total output in 2018, provide the context and details. No. 1 Newmont (5.5M oz) In an annual report recapping 2018, Newmont reported an unaudited net in- come (attributable to stockholders) of $280 million and an adjusted net income of $718 million. Net debt was unchanged yoy. With a year-end cash-on-hand to debt ratio of 2.5, the company described its balance sheet as "industry leading." After increasing for three years, unau- dited numbers suggest total gold output at Newmont fell by 3%. AISC and total price received per ounce (oz) has basical- ly been fl at since 2016. According to un- audited numbers, the AISC/oz for 2018 was $909, the average price received was $1,260/oz, and the difference between average price and AISC was $351. Total ore mined fell roughly 7% yoy in 2018 to roughly 514 million metric tons (mt), and was off roughly 41% from the 2013 high. The miner also processed roughly 3% less ore yoy, at roughly 189 million mt, which is right at the compa- ny's fi ve-year average. However, the min- er easily moved and processed more ore in 2018 than any of the other top miners reviewed here. Gold production fell 5% yoy at Carlin (Nevada, USA), 10% yoy at Boddington (Western Australia), and 4% at Yanacocha Top Gold Producers Process More Ore, Produce Less Gold, Again, in 2018 By Jesse Morton, Technical Writer In general, the gold miners, such as Goldcorp's Porcupine mine (above) in Ontario, have seen the market stabilize after a rocky 2018. 1 Excluded from this article are, among others, pure play gold producers that did not release in time reports providing key data. Companies that could qualify as top producers but were excluded from this analysis include, but are not limited to, Zijin Mining Group Co. Ltd. and Navoi Mining and Metallurgy Combinat.

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