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Mining companies report Q1 results

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Barrick Gold

Barrick Gold Corp. posted adjusted net earnings of $463 million, or 26 cents per share, for the first quarter of this year, down from the 2021 quarter, while President and Chief Executive Officer Mark Bristow touted the company’s strong cash position, an increased dividend and exploration opportunities in Nevada.

The net cash balance was $743 million at the end of the quarter, and the dividend for the quarter was 20 cents per share, the first Barrick dividend to include a 10-cent-per-share performance component under a new dividend policy.

The adjusted net earnings compared with $507 million, or 29 cents per share, in the 2021 quarter, and Toronto-based Barrick’s net earnings totaled $438 million, or 25 cents per share, down from $538 million, or 30 cents per share, in the year-ago quarter.

Nevada Gold Mines exploration drilling at the Turquoise Ridge Mine in Humboldt County is showing “huge potential,” including between Turquoise Ridge and the Twin Creeks site that were separated when Newmont Corp. operated Twin Creeks, Bristow said.

He said in the earnings webinar there is an exploration target at the fence line, and he reported that the third shaft at the underground Turquoise Ridge is on track for completion this year.

Turquoise Ridge also completed replacement of its conventional truck fleet with electric trucks in the first quarter, Barrick reported.

Barrick and Newmont are joint venture partners in Nevada Gold Mines, with Barrick holding 61.5% and Newmont, 38.5%, and Barrick as operator.

Bristow also said that the North Leeville exploration area north of Carlin continues to grow and remains one of NGM’s highest potential projects, while Ren is another project showing promise.

Exploration declines to reach the southern part of North Leeville underground are expected to be completed late in 2022, and underground drilling will start in the fourth quarter. The earnings presentation also stated a new exploration target to the west between Basin Bounding and Four Corners Fault is being tested at North Leeville.

Exploration at the Ren deposit on the Carlin Trend north of the Meikle underground mine also is showing promise, according to Bristow.

In the earnings report, he said that “in addition to its size and quality, Barrick’s asset base is distinguished by our continued success in replacing the reserves depleted by mining through brownfields exploration. At the same time, we continue to hunt for new Tier One assets across our expanding global footprint.

“The past quarter again produced promising results from all regions, with significant new potential identified in Nevada, Argentina and Africa’s Loulo District,” Bristow said.

Regarding labor issues, Bristow said Barrick has been restructuring its human resources policy, and the effort in Nevada is to redefine leadership and invest in new skills for “more modern mining,” and he said personnel changes are coming this year.

One of those changes will be the departure of Greg Walker at the end of the year as executive managing director of Nevada Gold Mines, according to the Barrick earnings report.

Bristow also said that NGM has extended a contract with the union in Nevada for another year. Operating Engineers Local 3 had represented Newmont employees, and Bristow said NGM inherited the union with the joint venture.

On cost management companywide as the world is struggling with a war in Ukraine, rising fuel prices, rising commodity prices and supply chain issues, Barrick reported that the war and sanctions imposed on Russia have had a direct impact on Barrick, and the company is working to manage costs.

Barrick’s group commercial and supply chain executive, Riaan Grobler said in the earnings report that the company is employing a proven multi-pronged strategy “built on a thorough understanding of our key cost drivers, commodities and services.”

He said Barrick has built a strong collaborative relationship with leading global supply chain partners, with a dedicated freight forwarding capacity that spans five continents, and the company is cultivating alternative suppliers as back-up.

Companywide, Barrick produced 990,000 ounces in the first quarter, down from 1.1 million in the first quarter of last year, but Bristow said Barrick is on track to meet its production targets for this year. Copper production was up, however, at 101 million pounds, compared with 93 million pounds in the first quarter of last year.

Bristow said first-quarter gold production was soft compared with the fourth quarter of last year when production totaled a little more than 1.2 million gold ounces, but Barrick is on track to meet its guidance for 2022 for between 4.2 million and 4.6 million gold ounces.

“Cost guidance may be at the higher end of the range due mainly to the increase in global energy prices, as well as the inflationary pressures across the global supply chain and the effect of a higher gold price on royalties,” he said.

Production was affected by depletion of stockpiled higher-grade Carlin and Cortez underground ore processed in the fourth quarter of 2021, Barrick reported. The stockpiles were the result of the Goldstrike mill failure in the second quarter of last year.

All-in sustainable costs for gold averaged $1,164 in the first quarter of this year, up from $1,018 in the 2021 quarter, and the company cited higher energy prices and global supply challenges because of the Ukraine war, and because higher gold prices result in higher royalties.

Barrick’s realized gold price in the first quarter was $1,876 per ounce, compared with $1,777 per ounce in the first quarter of last year.

Bristow said that for “every $100 per ounce rise in the gold price, the attributable free cash flow generated by our operations over a five-year period increases by $1.5 billion.”

In Nevada, NGM produced 747,000 ounces on a 100% basis, compared with 789,000 ounces in the 2021 quarter, down 5%, and all-in sustaining costs were at $1,118 per ounce, up 20% from $932 in the first quarter of last year.

On a 100% basis, Carlin operations produced 373,000 ounces, the same as a year ago, and Cortez produced 187,000 ounces, up from 163,000 ounces in the 2021 quarter, but Bristow said in the webinar that he hopes to see Cortez produce 1 million ounces starting next year.

Turquoise Ridge produced 109,000 ounces on a 100% basis, down from 149,000 ounces in the 2021 quarter, and Barrick reported the production there was impacted by mill maintenance in the first quarter.

Phoenix Mine south of Battle Mountain produced 37,000 gold ounces on a 100% basis for the quarter, down from 41,000 ounces last year, and Long Canyon near Wells produced 41,000 ounces on a 100% basis, down 36% from 63,000 ounces in the 2021 quarter.

Looking at Barrick’s newest project, Bristow said in the agreement with Pakistan to restart the Reko-Diq copper project, Barrick will be the operator and own 50%, with 25% state owned and 25% owned by the province.

Coeur Mining

Coeur Mining Inc. posted an adjusted net loss of $13.8 million, or 5 cents per share, for the first quarter, impacted in part by inflationary cost pressures, while the company reported its major expansion project at the Rochester Mine in Nevada is advancing.

Mitchell J. Krebs, president and chief executive officer of Coeur, said that the “lingering effects from Covid and inflationary pressures were two key themes during the quarter. However, Covid-related disruptions appear to be dissipating, and we’re managing our way through the supply chain shortages, disruptions and higher cost environment through our commitment to continue business improvement initiatives at each of our operations.”

Coeur provided a slide in its earnings presentation that outlines inflationary impacts, showing that diesel costs are up to $3.63 per gallon from $2.27 in the first quarter of last year, and cyanide costs per pound are up from 88 cents in the 2021 quarter to $1.24 in the 2022 quarter, for example.

Coeur’s senior vice president and chief financial officer, Thomas Whelan, said in the earnings call that Coeur typically consumes 16 million to 18 million gallons of diesel per year, and the company is running roughly 60-cents per gallon over budget.

The adjusted net loss compared with net adjusted income of $13.9 million, or 6 cents per share, in the first quarter of 2021, and the company’s net income before adjustments was $7.7 million, or 3 cents per share, compared with $2.2 million, or 1 cent per share, in last year’s quarter.

Michael Routledge, senior vice president and chief operating officer, said “the first quarter was expected to be our weakest, but we are pleased with the overall start of 2022.”

Revenue totaled $188.4 million, down from $202.1 million in the 2021 quarter, according to Chicago-based Coeur, which produced 75,409 ounce of gold and 2.5 million ounces of silver in the 2022 quarter, and operating cash was a negative $6 million, which Whelan said reflects “the chunky outflows typical of our first quarter,” including various obligations.

He said one of the steps Coeur has taken to improve finances was to “bolster our gold hedging program to provide a meaningful source of downside protection during this time of price volatility and elevated capital investment.”

Coeur also expanded its revolving credit facility by $90 million and completed a $100 million at-the-market equity offering.

The company reported that solid performances at the Palmarejo Mine in Mexico and the Wharf Mine in South Dakota more than offset Covid-19 impacts at the Kensington Mine in Alaska and lower production levels at Rochester in Pershing County.

“Coeur delivered first-quarter gold and silver production in line with expectations, and we remain positioned to meet full-year 2020 guidance,” Krebs said.

Companywide, Coeur produced 75,211 ounces of gold and 2.5 million ounces of silver in the first quarter, and the average realized gold price was $1,721 per ounce. The average realized silver price was $24.06 per ounce, compared with a gold price of $1,664 and a silver price of $26.19 in the first quarter of 2021.

The Rochester Mine near Lovelock produced 655,000 ounces of silver and 6,066 ounces of gold in the first quarter, down from 774,000 ounces of silver and 6,864 ounces of gold in the 2021 quarter.

Rochester Mine is continuing construction of the POA 11 expansion project, and Coeur reported that completion remains targeted for mid-2023. Krebs said that “we’re pleased to report that the pace of development activity at our Rochester POA 11 expansion project continues to accelerate.”

He said nearly 80% of the construction budget has been spent, or $477 million of the estimated $597 million cost of the expansion project.

“Following completion and ramp-up, Rochester is expected to drive a new growth phase for Coeur, featuring robust precious metals production and free cash flow from an exclusively North American asset base with a large and growing U.S. footprint,” Krebs said in the earnings report.

The Rochester expansion includes a 300-million-ton leach pad, a Merrill-Crowe process plant and a three-stage crushing circuit. The pad is nearing completion, while the plant is slated for completion in the second half of next year, and the crushing circuit, mid-2023.

Krebs also called attention to the U.S. Forest Service’s record of decision allowing for increased tailings and waste rock storage at the Kensington Mine to extend the mine life, successful exploration at Silver Tip in British Columbia and exploration at the Crown property in southern Nevada.

One reverse circulation and two core drills are active at Crown, focused on the C-Horst, Daisy and SNA deposits, and Coeur hopes to receive an amended permit mid-year to expand the discovery footprint.

Hecla Mining

Hecla Mining Co. reported income of $4.02 million, or 1 cent per share, for the first quarter of this year, a drop from $21.31 million, or 4 cents per share, in the first quarter of last year, and the company provided an exploration update for Nevada.

“All of our mines generated positive free cash flow despite inflationary cost pressures, slow supply chains and some Covid-19 related labor challenges,” said Phillips S. Baker, president and chief executive officer of Coeur d’Alene, Idaho-based Hecla.

“Hecla, the largest silver producer in the U.S., is also the country’s third largest zinc miner, and by-products contributed to the silver mines’ strong performance and help offset inflationary pressure,” he said.

Production companywide totaled 3.3 million ounces of silver, and gold production was at 41,642 ounces in the first quarter. There was no production from Nevada properties, however. Silver ounces produced in the first quarter of 2021 totaled 3.46 million ounces, and gold production was at 52,004 ounces in the year-ago quarter.

“Over the last eight quarters, we have generated $434 million in cash flow from operations, and this quarter marked our eighth consecutive quarter of free cash flow, with $232 million generated over that period. This strong, consistent performance has strengthened our balance sheet and led to credit rating upgrades,” Baker said in the earnings report.

He also said that Hecla expects quarterly silver production at the Lucky Friday Mine in Idaho to exceed one million ounces, “contributing to our increasing silver production profile. Growing U.S. silver production is particularly rewarding, as demand for silver to generate green energy is growing, and the need for domestically sourced metals is being understood because of the pandemic and the Ukrainian war.”

In the earnings call, Baker said that the “world is experiencing a combination of risk events which we haven’t seen for quite some time. Inflation is the highest in more than 40 years. You have the Russian-Ukrainian war, $100-plus oil prices, rising interest rates, supply chain disruptions, a shortage of skilled workers and, of course, the continuing pandemic.”

He said Hecla has weathered the Spanish flu, world wars, the Great Depression, recessions and the 1970s oil embargo in its 130 years, so Hecla has “the perspective to navigate these times successfully,” and one reason is that it operates in the U.S. and Canada.

Hecla stated that net income was affected by higher mining costs at Casa Berardi in Canada from inflationary pressures, and the increased use of contractors, income taxes, mining taxes in Nevada and foreign exchange losses. Lower production also impacted the bottom line.

The company said Casa Berardi was affected the most by inflation because it mines the most material and processes the largest volume of ore, therefore feeling the pinch of higher costs for fuel, steel, reagents and other consumables. And the lack of skilled workers is due to competition.

Lauren Roberts, senior vice president and chief operating officer, said with a strong metals market comes high demand for the skilled trades, and that is mainly in maintenance personnel.

“It is by far the most challenging position to fill and keep full, followed secondly by what we would refer to as full cycle miners and then, to a lesser degree, electricians and some of the other technical trades,” Roberts said in the call.

Casa Berardi is an open pit and underground operation in Quebec. It produced 30,240 ounces of gold and 7,068 ounces of silver in the first quarter, down from 36,190 ounces of gold and 10,675 ounces of silver in the 2021 quarter.

Greens Creek in Alaska produced 2.43 million ounces of silver and 11,402 ounces of gold in the 2022 quarter, while Lucky Friday produced 887,858 ounces of silver, up from 863,901 ounces in the first quarter of last year.

Nevada exploration in the first quarter included three drill rigs at Midas in Elko County focused on drill testing the Racer structure within the East Graben Corridor. The drilling is along 1.7 miles of strike length at a drill hole spacing of roughly 1,000 feet and initial drill testing of the Vapor Trail structure, according to Hecla’s earnings report.

At nearby Hollister in Elko County, exploration drilling continued in January and February from the second drill station of the Hatter Graben decline, but in February, development drifting at the Hatter Graben exploration area encountered high water inflows that eventually halted development.

Baker said in the earnings call that permitting is needed for dewatering “and it’s just going to take us toward the end of the year to get there.”

Drilling is suspended while Hecla evaluates the water management options and seeks permits. However, the company reported that assay results from two initial drill holes shows multiple narrow vein zones with intercepts that included 0.10 ounces per ton gold and 17.6 opt of silver over 0.6 feet estimated true thickness, and 0.10 opt gold and 3.1 opt of silver over 1.5 feet estimated true thickness.

Hycroft Mining

Hycroft Mining Holding Corp. owns the Hycroft Mine in Nevada where mining is on hold as the company plans for the mine’s future. Heap leaching is continuing at the site. The company reported gold production of 5,358 gold ounces and 16,861 silver ounces in the first quarter.

The company ended the first quarter with a cash position of $172.8 million, after raising gross cash proceeds in the quarter of $194.4 million through a $55.9 million private placement offering with Eric Sprott and AMC Entertainment and $138.6 million in an at-the-market equity offering program.

The Winnemucca-based company also filed the Initial Assessment Hycroft Technical Report in the quarter, showing that as of March 31, the Hycroft Mine had measured and indicated mineral resources of 9.6 million ounces of gold and 446 million ounces of silver.

The report also shows inferred mineral resources of 5 million ounces of gold and 150.4 million silver ounces, and Hycroft stated that all the resources are contained in oxide, transitional and sulfide ores.

“We are extremely pleased with the results from the first quarter and particularly in welcoming two new investors – Eric Sprott and AMC Entertainment,” said Diane Garrett, president and chief executive officer. “Our strengthened balance sheet allows us to reduce our debt, complete our technical studies and launch a robust exploration program to capitalize on recent exploration results.”

She said that several higher-grade intercepts were identified onsite, including the high-grade silver Vortex deposit, and “the initial results from our 2021 drill program also returned higher grades than previously known at the mine. Our work also revealed that silver may be under-estimated in the resource model due to a lack of assays for silver values.”

She said the company is now identifying targets for a drill program to optimize the high-grade and district potential of the mine.

i-80 Gold

With all its focus on Nevada, the one-year-old i-80 Gold Corp. is growing with two new property acquisitions and continued exploration and mine development, and the company’s chief executive officer, Ewan Downie, said in an Investment Day presentation that i-80 Gold “had a really good first year.”

However, expenses continue as i-80 Gold lays the ground for future production, which meant an operating loss for the first quarter.

The company posted a loss of $13.13 million for the first quarter, with revenue totaling $2.86 million from its first gold sales of 1,489 ounces from leaching at the Ruby Hill Mine at Eureka and the Lone Tree Mine.

“The quarter saw the company progress on plan and within budget as we aggressively pursue our peer-best production growth strategy to achieve our plan of becoming one of the leading gold producers in the United States by advancing our exploration and development programs,” said Chief Operating Officer Ryan Snow in the first-quarter report.

“In addition, initial gold sales from residual leaching at Lone Tree and Ruby Hill has been as expected, and we recorded our first revenue from the Ruby Hill and Lone Tree leach pads,” he said.

The Reno-based company is completing studies for the reactivation of the autoclave facility at Lone Tree, a property acquired in an asset exchange with Nevada Gold Mines. NGM received i-80 Gold’s 40% share of South Arturo as part of the swap that also allows i-80 Gold to use its processing facilities until Lone Tree is up and running.

Lone Tree, which borders Interstate 80, also provides i-80 Gold with infrastructure that includes a laboratory, warehouse, leach pads, a maintenance shop and an office complex. The site is becoming the center of i-80 Gold operations, Matthew Gili, president and chief operating officer, said in an investment presentation.

At another i-80 property, Granite Creek in Humboldt County near NGM’s Turquoise Ridge property, exploration continues, and the company acquired land from NGM because the exploration is leading to NGM’s land. The deal will increase the size of Granite Creek to roughly 1,280 acres.

The agreement is for $4 million cash payment and NGM receives a 10% net profits royalty. Barrick Gold Corp. also will retain a 0.5% net smelter royalty on the new property sections. Barrick operates Nevada Gold Mines in a joint venture with Newmont Corp.

Gili said a feasibility study on Granite Creek is expected at the end of this year for the underground portion of the mine site, and the planned open pit mining is in permitting for the “next stage of growth.”

Downie said the South Pacific Zone at Granite Creek is the No. 1 target, and it has “really panned out.”

The company reported that there were six drill rigs active at Granite Creek in the first quarter, and mining is underway, with the ore to be processed yet this year at NGM’s nearby Twin Creeks facilities. Small Mine Development is the contract miner.

In another property arrangement, i-80 Gold signed an agreement to acquire a land package from Baker Hughes at Argenta, providing 582 acre-feet of water rights, a rail heading and several advance-stage barite deposits and barite processing infrastructure.

Downie said i-80 Gold is buying the property in Lander County for the water and railhead, not for barite mining. The water rights are for the McCoy Cove project.

At McCoy Cove south of Battle Mountain, the portal for underground exploration is underway and had advanced 300 feet by the end of the quarter, according to the company.

Downie said that one question is why the McCoy Cove underground project was “just sitting there” for a long time, and he explained that a key reason is because the gold ore is refractory, and there are few places to process refractory ore in Nevada. However, with Lone Tree’s autoclaves i-80 will eventually be able to process refractory ore.

Meanwhile, the agreement with NGM for processing before Lone Tree is ready means i-80 can pursue McCoy Cove.

The CEO also said at the Investment Day presentation that “Ruby Hill will be the next major gold mine,” with “the biggest intercepts we’ve had. It’s really looking good.”

The company plans to begin permitting for construction of a decline to access the high-grade Ruby Deeps deposit at the mine that i-80 Gold purchased from Waterton. The mine is just outside the town of Eureka.

In a separate announcement, i-80 Gold reported that initial drilling at Ruby Hill focused on confirming high-grade mineralization within the Ruby Deeps Zone, and assay results for the first five holes demonstrate the potential for impressive gold grades and widths of mineralization.

The observations from the early drilling showed significant oxide mineralization in the upper zones and that ground conditions appear to be very favorable and intersection widths have met or exceeded what the company expected, i-80 Gold stated.

Granite Creek, Ruby Hill and McCoy Cove will all yield refractory ore once they are in production. Two open pit projects at Lone Tree, Buffalo Mountain and Brooks, will be oxide, heap-leach mines, however, and that ore will go on the leach pads that i-80 Gold acquired with Lone Tree.

The company was created when Equinox Gold acquired Premier Gold and spun off i-80 Gold in April of last year.

Kinross Gold

Kinross Gold Corp. reported adjusted net earnings of $70.6 million, or 6 cents per share, for the first quarter, down from the first quarter of last year, and the company stated that evaluation of underground mining potential at Round Mountain in Nevada is continuing.

The company excluded Russian assets from the report because of its plan to divest all Russian assets. Kinross announced on April 5 the planned sale of Russian assets to the Highland Gold Mining group of companies for $680 million in the wake of the war in Ukraine.

Kinross stated in its earnings report that the net loss from the Russian discontinued operations was $606.1 million in the first quarter, which includes an impairment charge of $671 million related to re-measurement of the Russian operations to fair value less costs to sell.

“During the quarter, we announced the sale of our Russian assets, and in late April, announced the sale of our Chirano mine in Ghana. With these impending divestments and the close of the acquisition of Great Bear Resources, our overall portfolio has been re-balanced, with approximately 70% of our production now expected to be generated by our mines in the Americas,” said the company’s president and chief executive officer. J. Paul Rollinson.

“We have maintained our guidance for our pro-forma portfolio, with a substantial production outlook of 2.15 million gold ounces in 2022, which is expected to grow to 2.3 million gold ounces in 2023. Going forward, we will prioritize balance sheet strength while also returning capital to our shareholders through dividends and our share buyback program,” he said.

Kinross reported that the company and Highland Gold are advancing the closing process that remains subject to Russian government approval. The agreement with Asante for the 90% of the Chirano mine in Ghana is for $225 million in cash and shares and was expected to close in May.

Rollinson said in the earnings call that the efforts in Russia are “in uncharted territory” as Kinross pursues closure of the sale. “We are doing everything we can.”

The adjusted net earnings in the first quarter of 2021 totaled $102.5 million, or 8 cents per share, and the net earnings from continuing operations attributable to common shareholders for the 2022 quarter totaled $82.3 million, or 7 cents per share, compared with $76.2 million, or 6 cents per share, for the 2021 quarter.

The Toronto-based company’s board declared a dividend of 3 cents per share for the quarter ending March 31.

The average realized gold price for the quarter was $1,875 per ounce, compared with $1,787 in the first quarter of last year.

Gold equivalent production in the quarter was 409,857 ounces, down from 563,166 ounces in the first quarter of last year, and Rollinson said the production profile averages 2 million ounces a year to the end of the decade, anchored by two tier one assets – Paracatu in Brazil and Tasiast in Mauritana—and project development in Canada.

In Nevada, Round Mountain in Nye County produced 45,319 gold equivalent ounces, down from 74,286 ounces in the 2021 quarter, and the Bald Mountain Mine in White Pine County produced 36,071 gold equivalent ounces, down from 51,408 ounces in the 2021 quarter.

Kinross reported production was down at Round Mountain due to fewer ounces recovered from the heap leach pad, and production is expected to increase at Bald Mountain in the second half of the year due to higher heap leach recoveries.

Rollinson said in the earnings call that because of inflation and cost pressures, Round Mountain and Bald Mountain are working together on synergies through continuous improvement efforts between the two operations.

The company stated that the Round Mountain optimization program is progressing on schedule to be completed in the second half of this year. The program is assessing shallower pit wall slope angles over a larger area of the pit to enhance stability and planning mining sequence for Phase W, Phase S and Phase X while studying the underground potential for Phase W and Phase X.

Pit wall instability was detected at the mine last year.

The program’s interim results have led to the contemplation of a mine sequence plan that divides mining of Phase W into four parts, with the first two parts mined over the next three to four years as part of the open pit, according to the earnings report.

Mining for the third and fourth parts of Phase W is expected to begin after 2024 and could include underground mining, according to Kinross. Phase S mining is expected to start later this year.

Paul Tomory, executive vice president and chief technical officer, said in the earnings presentation that with recent geotechnical work and exploration success, there is an enhanced opportunity to move underground sooner.

Also at Round Mountain, exploration is showing promising results, including high grades, at Gold Hill to the north of Round Mountain. The focus is on extending the Gold Hill mineralized vein structures.

Another exploration project, called Curlew Basin, in Washington State is identifying new mineralized veins north of the Kettle River mill. Tomory said the underground exploration there could lead to production and the restart of the mill at Kettle River.

Rollinson said that “over the quarter, we achieved record production at Tasiast, and our project pipeline continued to advance well. The Tasiast 24k project remains on track, and we poured our first gold at the La Coipa project. We are already making good progress on our exploration program at the Great Bear project and are seeing positive results to support our goal of declaring an initial inferred resource estimate with our 2022 year-end results and our vision of developing a large, long-life mining complex.”

Kinross poured the first gold bar at La Coipa in Chile in February, and the mine produced 524 gold equivalent ounces in the first quarter.

McEwen Mining

McEwen Mining Inc. had a consolidated net loss of $19.3 million, or 4 cents per share, in the first quarter, during which the company received regulatory approval to amend its plan of operations at the Gold Bar Mine in Nevada to expand the mine.

The approval allows McEwen Mining to include the Gold Bar South deposit, and the company stated that it plans to start construction of the access road and heap leach expansion to accommodate expected gold production starting in the fourth quarter.

Companywide, the Toronto-based company produced 20,850 ounces of gold and 336,500 silver ounces, or 25,100 gold equivalent ounces in the quarter, compared with 30,600 gold equivalent ounces in the first quarter of last year.

Gold Bar in Eureka County produced 6,300 gold equivalent ounces in the quarter at an all-in sustaining cost of $2,663 per GEO sold, down from 7,400 GEOs in the 2021 quarter at an all-in cash cost of $1,934 per ounce.

The company stated that mining from the Pick open pit was 44% below target in the first quarter of this year due to mining contractor employee turnover, lower blasting productivity and the segregation of potentially preg-robbing carbon in mineralized material that could not be heap leached.

Further metallurgical testing is underway, McEwen Mining stated, and the company is evaluating if carbon will remain an issue during the current and future phases of mining at Pick.

McEwen also reported that heap leach and process plant operation partially offset the deficit in ore mined by achieving 13% higher gold recovery and 8% higher gold grade than the corresponding targets for the quarter at Gold Bar.

Near-mine exploration is underway around Pick with encouraging oxide drill results, the company said, and one drill rig is operating at targets designed to extend the Pick deposit. McEwen spent $1.5 million on exploration activities at Gold Bar in the quarter.

The Fox Complex in Canada produced 7,700 gold equivalent ounces in the quarter, up from 5,200 GEOs in the first quarter of last year, primarily due to mining at the new Froome Mine versus the Black Fox Mine. However, the solid performance was offset by a labor shortage due to Covid-19 and equipment failures at the Stock mill.

The company’s preliminary economic assessment for the Fox Complex released in the quarter shows that the expansion project would provide potential average gold production of 80,800 ounces of gold per year over nine years, after the depletion of current resources at Froome.

Additional exploration work will be conducted throughout this year to support the ongoing studies necessary to advance the proposed expansion project. McEwen spent $1.7 million on exploration at Fox in the quarter.

The company also reported that its 49% interest in the San Jose Mine in Argentina produced 6,450 gold ounces and 335,500 silver ounces, or 10,700 gold equivalent ounces, in the first quarter, down from 16,700 GEOs in the 2021 quarter. The mine was impacted by Covid-19-related employee absences in the quarter.

McEwen Mining additionally is continuing exploration at the Los Azules copper project in Argentina, with 35,360 feet of drilling completed by May 10, with drill contractor mobilization of crews, equipment and parts adversely impacted by Covid-19 and industry-wide labor shortages, the company said.

McEwen Copper has an 81% interest in the project, and the earnings report states that the critical issue of road access to the site has been resolved with the development of a second road at a lower altitude to allow for year-round site access.

Additionally, McEwen Mining said the New York Stock Exchange notified the company in early January that the average price of its common stock for the prior 30 days fell below $1 per share, and the company had six months to bring the share price back up.

The company’s board has not approved a reverse share split so McEwen will seek other means of remaining on the NYSE. If it is delisted, however, it will continue to trade on the Toronto Stock Exchange, the earnings report states.

Newmont Corp.

Newmont Corp., which posted first-quarter earnings down from the 2021 quarter because of Covid-19 and supply chain issues, also reported a potential change at the Cripple Creek & Victor Mine in Colorado that could affect Nevada Gold Mines.

Newmont’s first-quarter earnings were $448 million, or 56 cents per share, down from $559 million, or 70 cents per share, in the first quarter of 2021. The company reported adjusted net earnings of $546 million, or 69 cents per share, while revenue was up 5.2% to $3.02 billion on higher gold and copper prices despite lower production.

The Denver-based company produced 1.34 million ounces in the quarter, compared with 1.46 million ounces in the 2021 quarter, including 288,000 ounces of gold from its share of Nevada Gold Mines production. Newmont owns 38.5% of NGM, and Barrick Gold Corp. holds 61.5% and is the operator.

Cripple Creek ships ore from its mine to NGM in Nevada for processing, but Newmont’s chief operating officer, Rob Atkinson, said in the April 22 earnings call that Newmont is looking at converting Cripple Creek to a heap leach operation only “instead of sending concentrate to Nevada.”

He said that with the pending conclusion of a contract for shipping the ore, “we’re stepping back” to assess not running the mill and only heap leaching ore. Atkinson said there will be an update in July.

The average realized gold price was $1,892 per ounce, up from $1,751 per ounce in the 2021 quarter, and Chief Financial Officer Nancy Buese said Newmont receives $400 million in free cash flow from every $100 hike in the gold price.

Newmont’s president and chief executive officer, Tom Palmer, said in the first-quarter earnings call that the company remains on track to meet its guidance for the year of 6.2 million ounces of gold production, and he expects production to ramp up in the second half of the year.

Palmer said there were Covid-19 challenges in the first quarter because of a surge in the Omicron variant that led to absences and affected production, but he said Newmont’s requirement that all employees be vaccinated prevented more serious cases.

Newmont also is closely monitoring supplies of critical materials due to pandemic-related supply chain issues and issues created with the war in Ukraine, Palmer said, commenting that “we are in uncharted territory.” The company has budgeted a 5% cost escalation for this year.

The all-in sustaining costs for production in the first quarter averaged $1,156 per ounce, compared with $1,039 in the first quarter of last year. The all-in cost for NGM was $1,086 in the quarter.

In addition to the 1.34 million ounces of gold production, Newmont reported 350,000 ounces of attributable gold equivalent ounces from co-products.

The production drop was attributed to lower mill throughput at Cripple Creek, Tanami in Australia, and Porcupine in Canada, as well as Nevada, and lower ore grades at Penasquito in Mexico, Newmont’s 40% share of Pueblo Viejo in the Dominican Republic, Eleonore in Canada, and Porcupine, and a build-up of in-circuit inventory.

The company reported higher ore grade milled at Boddington in Australia and higher production at Yanacocha in Peru.

Newmont acquired 100% of the sulfides project at Yanacocha in the quarter, including Buenaventura’s 43.65% and Sumitomo Corp.’s 5% interest, and the company continued to advance the sulfides project, as well as the Tanami Expansion 2 in Australia and Ahafo North in Ghana.

The company also announced a dividend of 55 cents per share for the quarter, consistent with the prior quarter, and stated that $475 million remains of its $1 billion share buyback program and share buybacks will be used opportunistically this year.

SSR Mining

SSR Mining Inc. reported adjusted net income of $65.94 million, or 30 cents per share, in the first quarter of this year, down from $110.5 million, or 50 cents per share, in the 2021 quarter, while the company’s president and chief executive officer, Rod Antal, said that “overall, we are off to a really strong start to the year.”

Gold equivalent production of 173,657 ounces was a dip from 196,094 ounces in the 2021 quarter, but he said production was “in line with expectations,” and SSR Mining will meet its production goal for the year of between 700,000 and 780,000 ounces.

Gold production at the Marigold Mine in Nevada was down to 33,788 ounces in the first quarter, compared with 67,936 ounces in the 2021 quarter, because of mine scheduling and an increase in heap leach inventory that delayed a portion of production into the second quarter, according to the company.

Stewart Beckman, executive vice president and chief operating officer, said in the earnings call that Marigold started with a soft quarter but the big quarter will be the fourth, when higher grades will be accessed.

Marigold at Valmy remains on track for production guidance of 215,000 to 245,000 ounces this year, the company reported.

Net income attributable to equity holders of the Denver-based company for the first quarter was $67.56 million, or 31 cents per share, down from $108.86 million, or 48 cents per share, in the 2021 quarter, while free cash flow was $27.7 million in the first quarter, and the company had cash and cash equivalents of $999 million at the end of the quarter.

Antal said in the earnings call that the amount of cash “is a really good problem to have,” and the company will continue to look at ways to invest in the business and return excess cash to shareholders. Revenue totaled $355.45 million, compared with $366.48 million in the first quarter of last year.

SSR Mining’s board increased the quarterly dividend by 40% to 7 cents per share in the first quarter over the prior quarter.

The average realized gold price for the quarter was $1,880 per ounce, up from $1,798 per ounce in the 2021 quarter, and the average realized silver price was $23.85 per ounce, down from $26.02 in the 2021 quarter.

“The first quarter of 2022 continued SSR Mining’s proud track record of operational outperformance as we delivered gold equivalent production of 173,675 ounces at AISC (all-in sustaining costs) of $1,093/oz, positioning the company well against full-year guidance,” Antal said.

He said that “in particular, we reported record quarterly production of 52,582 ounces at Seabee as we accessed a continuation of a high-grade zone outside of the mineral reserve that was first mined in the second quarter of 2021.”

Seabee is in Saskatchewan near the Taiga Gold project that SSR Mining acquired in the first quarter. The transaction consolidated a 100% interest in the Fisher property contiguous to Seabee, eliminated a 2.5% net smelter return royalty on the Fisher property and added five new properties covering more than 71,908 acres.

SSR Mining reported that its assets in Saskatchewan now cover nearly 324,079 acres.

At Copler in Turkey, the ramp up of the flotation circuit is well underway, allowing the mine to process a record number of metric tons through the sulfide plant in the first quarter. Copler produced 70,641 ounces of gold in the quarter, down from 78,478 ounces in the 2021 quarter.

Puna in Argentina produced 1.3 million ounces of silver, down from 1.79 million ounces in the same quarter of last year, and SSR Mining attributed the drop to heavy rains and lower grades.

SSR Mining also reported that its gold reserves increased by 14% to 9.2 million ounces in the first quarter from the total 2021 reserves announced earlier this year. The boost came from the Ardich deposit in Turkey and from Seabee’s Gap Hangingwall, which added 1.1 million ounces to gold reserves net of depletion.

Alison White, executive vice president and chief financial officer, said the company is seeing inflation in the price of consumables, including a 10% increase in diesel prices, and “we’re keeping a tight watch” on prices.

“We’ve done a pretty good job so far managing it,” Antal said of rising costs.

Companywide, the 173,675 gold equivalent ounces produced included 157,010 gold ounces, down from 170,149, and 1.3 million silver ounces, down from 1.8 million ounces in the first quarter of last year.

The company additionally stated that it produced 7.3 million pounds of lead, up from 6.14 million pounds in the first quarter of 2021, and 1.84 million pounds of zinc, down from 3.08 million pounds in the 2021 quarter ending March 31. 


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