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 29 of 83

GOLD MINERS ROUNDUP 28 E&MJ • MAY 2019 ore was processed at the mine. Output for the year rose yoy at four of the company's five producing mine sites. AISC fell by roughly 1%, and was 16% below the average for the company for the preceding five years. Polyus ranked first among the top miners for lowest AISC. Average realized price rose $6 yoy, but was 2% below the average of the compa- ny for the preceding five years. The dif- ference between realized price and AISC was $660, easily the highest for the min- ers E&MJ researched. In 2018, the company logged $736 in capital expenditures. Roughly $182 million of that went to Olimpiada, which ordered new haul trucks and plant circuit solutions. The company reported spend- ing more than $100 million last year on IT infrastructure improvement projects and enterprise resource planning. In 2019, the company plans to invest roughly $725 million "across the busi- ness," Polyus reported. Big equipment purchases and infrastructure projects were reported to be under way at three mines at the close of 2018. The company reported it expects to produce 2.8 million oz in 2019. Polyus continues to report its reserves rank it second in the world. Exact num- bers weren't supplied timely by the com- pany. At the close of 2017, the company reported reserves of 68 million oz. No. 6 Newcrest Mining (2.42M oz) For the last half of 2018, Australia's Newcrest Mining reported a net profit of $237 million. For the year that ended in June 2018, it reported a "statutory" profit of $202 million. The company by many measures had a banner or even breakout 2018. For example, it is the only company E&MJ looked at that managed a trifecta: increased production, lowered AISC, and increased the average realized price yoy. In 2018, total gold output rose 6% yoy, to just above the average for the company for the preceding half-decade. The company mined 17% more ore, and processed roughly 3% more ore yoy. Both numbers were above the averages for the company for the preceding five years. Lihir, the company's flagship mine, and the third biggest mine in the world, moved 33 million mt of ore to produce 975,571 oz gold, a 6% increase yoy. In 2018, AISC fell 7%, to $780/ oz, roughly 6% below the average for the company for the preceding half-de- cade. Of the companies E&MJ tracks for this article, Newcrest ranked second for lowest AISC. Average realized price for the year was up $2 yoy and was 2% higher than the average for the com- pany for the preceding half decade. Newcrest ranked second for highest realized price in 2018. The difference between price received and AISC was $494, also ranking second. During 2018, the company acquired a stake in Lundin Gold, released studies on two big projects, and a resource estima- tion on a third. For the six months ending in December 2018, the company logged non-sustaining capital expenditures of $74 million. The company expects non-sustaining capital expenditures of as much as $235 million for the year ending in June 2019. It expects to produce 2.5Moz for the same timeframe. Newcrest reported estimated gold ore reserves of roughly 54Moz as of the end of December 2018. No. 7 Goldcorp (2.3M oz) Goldcorp reported net earnings of $63 million for 2018, down from $360 mil- lion in 2017. The company reported a net loss for the year of more than $4 billion, and adjusted net debt rose by 20% yoy. Total gold output fell by almost 11% yoy to the lowest level since 2007. The company reported the decrease in produc- tion hit revenue numbers and was the re- sult of lower grade at the company's flag- ship mine, Peñasquito (Mexico), which is locked into a "multiyear waste-stripping campaign" and logged a 5% decrease yoy in ore milled and a staggering 43% de- crease yoy in total gold output. AISC rose by 3% yoy, but it was roughly 7% lower than the average for the compa- ny for the five preceding years. The average realized price rose by $4 yoy and was right at the average for the company for the five preceding years. The difference between price received and AISC was $419. In 2018, the Peñasquito's Pyrite Leach Project achieved first gold in November and commercial production in December. Borden (Ontario, Canada) and Coffee (Yu- kon, Canada) projects both moved forward with permitting, and NuevaUnión (Chile) completed a prefeasibility study. The com- pany logged $1.2 billion in "expenditures on mining interests" for the year. For 2019, the company's acquisition by Newmont is calendared to close in Q2. Lower grade will impact numbers from three of the company's seven producing mines. However, production numbers could rise yoy as grade improves at Peñas- quito, Goldcorp reported. Musselwhite's Materials and Handling project (Ontar- io, Canada) and Borden are expected to achieve commercial production in H2. The miner reported $301 million in "cap- ital expenditure commitments" for 2019. Goldcorp reported it expects to pro- duce between 2.2 million and 2.4 million oz in 2019 at an AISC between $750 and $850/oz. Mineral reserves as of June 30, 2018, were 52.8 million oz. Kinross Gold's Fort Knox mine in Alaska produces 256,000 oz of gold last year.

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