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Newmont

Newmont Mining Corp.’s fourth-quarter 2018 adjusted net income was $214 million, or 40 cents per share, up from $206 million, or 39 cents per share, in the 2017 quarter, the company reported Feb. 21 as it moves closer to a merger with Goldcorp Inc.

The company’s net income attributable to shareholders was $2 million, compared with a loss of $542 million in the fourth quarter of last year, according to the Greenwood Village, Colo.-based company’s earnings report.

The company reported a net loss, however, from continuing operations in the quarter of $3 million, or zero cents per share, up $546 million over the 2017 quarter loss, mainly due to lower income tax expense.

Revenue for the quarter was up 6 percent to nearly $2.05 billion because of higher gold production, partially offset by lower average realized metal prices. Newmont reported the average realized gold price in the fourth quarter was $1,233 per ounce, down 3 percent from the 2017 quarter.

Looking at Nevada, Newmont continues to be enthused about potential expansion at the Long Canyon Mine near Wells, with the feasibility study completed and the U.S. Bureau of Land Management beginning an environmental impact statement on the project.

The BLM held a public outreach meeting on Long Canyon on Dec. 3.

Newmont’s president and chief operating officer, Tom Palmer, said in an earnings conference call that the plan looks at both open pit and underground mining at Long Canyon.

Newmont Chief Executive Officer Gary Goldberg said in the call that the Twin underground operations at the Twin Creeks Mine north of Golconda will extend the mine life there.

Gold production in the fourth quarter company-wide totaled 1.44 million ounces, up 8 percent from the 2017 fourth quarter, and full year gold production was at 5.1 million ounces, down 3 percent. Copper production was at 11,000 metric tons, in line for the quarter. For the year there were 49,000 metric tons of copper produced, down 4 percent.

North American gold production totaled 626,000 ounces in the fourth quarter, up from 556,000 ounces in the 2017 fourth quarter. North American production includes Newmont’s operations on the Carlin Trend in Nevada, the Twin Creeks Mine, Long Canyon, 25 percent of the Turquoise Ridge Mine operated by Barrick Gold Corp., the Cripple Creek & Victor Mine in Colorado, and 50 percent of Galore Creek in British Columbia.

All-sustaining costs for gold production company-wide were down 9 percent to $845 per ounce in the fourth quarter. In Nevada, all-in sustaining costs in the fourth quarter were $884 an ounce at Carlin, down from $971 in the 2017 quarter, $1,007 per ounce at Phoenix, up from $1,000 last year, $759 per ounce at Twin Creeks, down from $833, and $511 per ounce at Long Canyon, up from $439 per ounce in the 2017 quarter.

The forecast continues to be 1.9 million ounces of gold production from North American operations in 2019 and 5.2 million ounces company-wide in 2019.

The company stated that higher grade production from the Northwest Exodus operations on the Carlin Trend and Twin underground mine at Twin Creeks will be offset by depletion of Silverstar ore at Carlin and lower gold production at the Phoenix Mine near Battle Mountain.

Newmont reached commercial production at Twin Underground and Northwest Exodus in 2018. Phoenix mining is shifting to higher grade copper ore from the Bonanza open pit, the company reported.

The failing of a wall at the Gold Quarry open pit north of Carlin in October may impact gold production by roughly 70,000 ounces in 2019, Newmont reported, but the company stated mine plan optimization continues for Gold Quarry.

Palmer said in the call that Gold Quarry provides only 5 to 10 percent of Carlin’s production.

Newmont also completed a concentrates project at the Cripple Creek & Victor Mine in during 2018 and acquired the 50 percent interest in Galore Creek in British Columbia.

The concentrates project involves shipping gold concentrate from Cripple Creek via rail to Elko for processing at Newmont’s Mill 6 at Carlin, and Palmer said that project is “fully operational.”

Newmont’s earnings report and production figures don’t reflect the company’s planned merger with Goldcorp expected in the second quarter of this year in a $10 billion transaction. When joined, the company will be known as Newmont Goldcorp.

Goldberg stated in the earnings report adjusted net income of $718 million for 2018 “gave us the means to complete expansions in the U.S. and Africa, advance projects and exploration on four continents and pursue an agreement to create the world’s leading gold business as measured by assets, people, prospects and value.”

He said in the call that with the merger, Newmont will “operate first-class assets on four continents.”

Newmont also announced gold reserves for 2018 were 65.4 million ounces, compared with 68.5 million ounces at the end of the prior year, while gold resources increased to 55 million ounces, up from 48.2 million in 2017.

Gold reserves were calculated at a gold price of $1,200 per ounce, Palmer said.

Exploration added 6.7 million ounces of gold in the year, but the exploration additions were offset by negative revisions totaling 3.6 million ounces and depletion through mining of 6.1 million ounces. The revisions included model changes at the Phoenix Mine and cost and pit design changes at Carlin, Newmont reported.

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