Barrick Gold Corp.’s third-quarter adjusted net earnings were higher at $264 million, and the company reported that Nevada Gold Mines delivered a solid performance for the quarter, the first since formation of the joint venture between Barrick and Newmont Goldcorp Corp.
Barrick Chief Executive Officer and President Mark Bristow said in a teleconference the joint venture staff has “done an outstanding job of integrating operations.” He said they have been able to budget an average of $311 million in annual synergy savings for the next five years, and they are working toward achieving about an additional $150 in annual savings. The joint venture’s goal is an annual savings of $450 million to $500 million.
Nevada Gold Mines is the joint venture of Barrick and Newmont formed July 1 for the mines in Nevada they had each owned, with Barrick as 61.5 percent owner and operator. Newmont holds 38.5 percent of Nevada Gold Mines.
The $265 million in adjusted net earnings, or 15 cents per share, compared with adjusted net earnings of $89 million, or 8 cents per share, in the third quarter of last year.
Barrick’s net earnings for the quarter ending Sept. 30 were $2.28 billion, or $1.30 per share, compared with a loss of $412 million, or 35 cents per share, in the 2018 quarter.
Average gold prices in the third quarter were $1,476 per ounce.
The company reported third-quarter gold production of 1.31 million ounces, compared with 1.15 million ounces in the 2018 quarter, and this included 535,000 ounces for Barrick’s share of Nevada Gold Mines production. Combined with Newmont’s share of 344,000 ounces, Nevada Gold Mines produced 879,000 ounces in the quarter.
Total cash costs for Nevada averaged $570 per ounce and all-in sustaining costs were $772 per ounce, according to Barrick’s report.
The joint venture includes the Cortez Deep South project that received U.S. Bureau of Land Management approval in September and is expected to contribute to Cortez gold production beginning in 2020 and ramp up to 150,000 to 250,000 ounces of gold production from 2022 to 2031.
According to Barrick, Deep South will use infrastructure already approved under current plans to expand mining in the Lower Zone of the Cortez underground mine.
Barrick’s Goldrush complex also is moving ahead toward a mine, with a plan of operations submitted to the BLM in September as a step in the permitting process for the project, and the company wrote that a small part of its nearby Fourmile gold discovery that is contiguous to Goldrush is included in the plan.
Barrick stated that it anticipates project approval in two years.
Toronto-based Barrick also reported construction of the twin exploration declines at Goldrush has been accelerated, and the declines will provide access to the ore body and for underground exploration drilling to convert resources to reserves. Progress is at 46 percent.
Goldrush is part of the joint venture but Fourmile isn’t at this point, but can be added when certain targets are met. Bristow said it would be a couple of years before Barrick is ready to move into the feasibility stage with Fourmile.
Bristow said in the teleconference that Barrick has the right to “force Fourmile into the joint venture at fair market value and cost of the feasibility study” under a formula that allows Newmont to pay to keep its current 38.5 percent ratio or agree to dilute its percentage.
There also was a new discovery borehole north of Fourmile, Barrick reported.
Barrick’s earnings report provided an update on work at the Turquoise Ridge Mine in Humboldt County. Construction of a third shaft at the underground mine is on schedule and on budget, and work in the third quarter focused around the hoist frame and head frame.
“The shaft will significantly improve the ventilation. That’s a big holdup in increasing production,” Bristow said.
All sinking equipment is on site and ready for commissioning in the current quarter.
Nevada Gold Mines’ Carlin operations “offer lots more to build on,” including extensions at the Leeville underground mine, and there is a significant orebody between the Carlin operations that were Newmont’s and the Goldstrike Mine that was Barrick’s, Bristow said.
Looking at Barrick’s progress since the merger with Randgold Resources at the first of this year, Bristow said that comparing what “we said we would do with what we’ve done” is at 100 percent, and the company is showing that it is “very different company.”
He pointed to Barrick’s 25 percent increase in its dividend. The company announced the dividend is 5 cents per share, and Graham Shuttleworth, senior executive vice president and chief financial officer, said the increased dividend reflected Barrick’s strong operating performance and growth in cash flows.
Bristow also reported that the Pueblo Viejo Mine in the Dominican Republic, a joint venture with Newmont Goldcorp, “has an enormous resource base that is in a class of its own.” There are plant expansion studies underway.
Barrick’s Veladero Mine in Argentina is one of the company’s “biggest challenges,” Bristow said, but the team there has driven down costs and improved relationships with the community and government, and there are opportunities in and around Veladero.
Newmont Goldcorp Corp. reported third-quarter gold production of 1.64 million ounces companywide, including 344,000 ounces for its share of Nevada Gold Mines production, and the company posted adjusted net income of $292 million for the quarter.
The 344,000 ounces for Newmont Goldcorp’s 38.5 percent share of Nevada Gold Mines production combined with Barrick Gold Corp.’s preliminary production figure for the third quarter of 535,000 ounces brings the total joint venture production for the quarter to 879,000 ounces.
Barrick owns 61.5 percent of the Nevada Gold Mines joint venture between the two companies for mines they owned in Nevada, with Barrick as the JV operator. The JV was finalized July 1, so the third quarter was the first one to fully encompass Nevada Gold Mines.
Newmont Goldcorp Chief Executive Officer Tom Palmer said in a presentation the joint venture with Barrick took “a tremendous amount of work to achieve this milestone, and many of our people are still working hard to support this joint venture.”
Newmont’s adjusted net income of $292 million, or 36 cents per share, compared with $175 million, or 33 cents per share, in the third quarter of 2018 before the merger of Newmont Mining and Goldcorp in April.
The company reported net income from continuing operations was $2.23 billion, up $2.39 million from 2018, mainly because of the formation of Nevada Gold Mines, higher production and higher realized gold prices. The average realized gold price in the quarter was $1,476 per ounce, up $275 over the 2018 quarter.
Newmont posted a $2.88 million gain in the third quarter from the Nevada Gold Mines joint venture start-up.
The Greenwood Village, Colo.-based Newmont Goldcorp reduced its outlook for 2019 gold production to 6.3 million ounces, down from an earlier prediction of 6.5 million, because of complications that included a blockade at the Peñasquito Mine in Mexico, a conveyor fire at Musselwhite in Canada and lower grades at Eleonore Mine in Canada.
The adjusted earnings of 36 cents per share were lower than analyst predictions that averaged 37 cents per share, according to Bloomberg. Newmont share prices closed Tuesday at $37.55, down $1.30.
Palmer said in an earnings teleconference that the combined synergies from the Goldcorp merger are exceeding earlier targets, and the company is “building momentum for an even stronger fourth quarter.”
The company will see 65 percent in synergies from the merger with Goldcorp achieved by the end of this year, or $240 million, rather than the earlier expected $145 million this year out of a total of $365 million predicted for the merger.
The 1.64 million ounces of gold in the quarter ending Sept. 30 were up 28 percent over the 2018 quarter, and costs applicable to sales were at $733 per ounce, up 6 percent over the third quarter of last year. All-in sustaining costs were $987 per ounce, up 10 percent over last year.
Newmont reported that changes in the company’s portfolio in the quarter, in addition to the creation of Nevada Gold Mines, include the potential sale of Red Lake in Canada, beginning commercial production at the Borden underground mine in Canada, expansion of the Ahafo Mill in Ghana, achieving commercial production at the Quecher Main operation at Yanacocha in Peru, advancing the Tanami Mine expansion in Australia and divesting the Nimba iron ore project in Guinea.
Looking at Peñasquito, Chief Operating Officer Rob Atkinson said Newmont Goldcorp restarted discussions Nov. 4 with the local community, where the main reason for the blockade was water concerns. The blockade was lifted Oct. 8, and the mine restarted full operations Oct. 22.
After the blockade ended, Newmont stated that the illegal protest caused a shortfall of 11,000 ounces of gold production and 51,000 gold equivalent ounces from the byproducts of silver, lead and zinc.
Atkinson also reported in the earnings teleconference that improvements continue at Musselwhite in Canada, where a conveyor fire impacted production.
Kinross Gold Corp. posted net earnings of $60.9 million, or 5 cents per share, and adjusted net earnings of $104 million, or 8 cents per share, in the third quarter, and the company reported completion of projects at its two Nevada mines.
Construction of the Phase W project at the Round Mountain Mine in Nye County and the Vantage Complex at the Bald Mountain Mine in White Pine County ended in the quarter, and the projects were commissioned and handed over to their operating teams, Kinross reported.
Phase W expands the open pit at Round Mountain and includes a new shop, warehouse and new processing facilities to extend the life of the gold mine.
The Vantage Complex is in the south end of the Bald Mountain site and includes a heap leach pad, processing facilities, shop and administrative building.
The net earnings for Kinross compared with a loss of $104.4 million in the third quarter of last year, and the adjusted net earnings of $104 million compared with a loss of $48.4 million in the 2018 quarter.
“Our portfolio of mines continued to perform well during the third quarter, delivering higher production, lower costs and more than doubling operating cash flow, compared with the same period last year,” Kinross President and Chief Executive Officer J. Paul Rollinson said in the earnings announcement.
Toronto-based Kinross produced 612,697 ounces of gold in the quarter, up from 591,928 ounces in the 2018 quarter, at an attributable production cost of sales per gold equivalent ounce sold of $735 per ounce, down from $777 per ounce last year.
Round Mountain produced 82,195 gold ounces in the third quarter, down from 94,153 ounces in the 2018 quarter, and Bald Mountain produced 33,995 ounces, for a major drop from 72,560 last year, according to the earnings report.
The company stated that Round Mountain production was lower mainly due to the timing of ounces recovered from the leach pads and lower mill grades but is expected to improve in this fourth quarter. Bald Mountain’s production dropped mainly due to a slower-than-expected ramp-up at the new Vantage Complex, as well as fewer ounces recovered from heap leach pads at the mine.
Rollinson said the company’s largest producing mines, Paracatu in Brazil, Kupol in Russia and Tasiast in Mauritania “once again achieved our lowest costs.”
He said Kinross remains “on track to meet our annual production guidance, and given strong results year-to-date, are tracking towards the low end of our cost of sales guidance.” The company is forecasting production of 2.5 million gold equivalent ounces in 2019 at production cost of sales of $730 per ounce.
Hecla Mining Co. reported a net loss attributed to shareholders of $19.7 million, or 4 cents per share, for the third quarter, gold production of 77,311 ounces and silver production of 3.3 million ounces. The company also affirmed that the quarter ending Dec. 31 is the last quarter of mining at the Midas Mine in Elko County.
The Coeur d’Alene, Idaho-based company reported the $19.7 million loss compared with a loss of $23.3 million, or 5 cents per share, for the 2018 quarter.
Hecla attributed the better 2019 quarter to higher silver and gold production and higher realized silver and gold prices, as well as a $7.9 million reduction in exploration and pre-development expenditures, an acquisition cost of $6.1 million in the 2018 quarter and suspension-related costs going down $2.8 million at Lucky Friday in Idaho.
The average realized gold price in the quarter was $1,475 per ounce, and the average realized silver prices was $18.18 per ounce, up 24 percent from the $14.68 silver price in the 2018 quarter. The gold price was up 22 percent.
The gold production of 77,311 ounces was up from 72,995 ounces last year, and the silver production for the quarter of 3.3 million ounces was up from 2.5 million in the 2018 quarter, while Nevada production of gold was 22,381 ounces, up from 13,789 ounces in the 2018 quarter, and silver production was 43,777 ounces, down from 84,145 ounces last year.
Hecla acquired mines in Nevada on July 20, 2018. Mining and exploration continued at Fire Creek in Lander County, and there was still exploration in the third quarter at the Hatter Graben deposit at the Hollister Mine in northern Elko County. Mining was put on hold at Hollister earlier this year.
The company reported the cash cost for production in Nevada, after by-product credits, was $817 per ounce, down from $1,179 an ounce in the third quarter of last year.
Turning to Idaho, the company reached a tentative labor agreement at Lucky Friday, where mining was affected by a strike.
“We expect the mine ramp-up to full production to take about a year’s time, which would be good for the workforce, shareholders and the community,” Hecla President and Chief Executive Officer Phillips S. Baker Jr. stated in the Nov. 7 earnings announcement.
He also congratulated Lucky Friday for receiving a Sentinels of Safety Award, the highest safety award in the country.
McEwen Mining Inc., which went into full production at the Gold Bar Mine in Eureka County in the third quarter, posted a net loss of $11.5 million, or 3 cents per share, in that quarter ending Sept. 30 as the company continued to invest in development and exploration.
The net loss is better than the $23.9 million net loss, or 7 cents per share, in the third quarter of last year, according to the earnings report.
Gold production in the 2019 quarter totaled 35,042 ounces of gold, and silver production was at 947,145 ounces for a gold equivalent of 45,930 ounces. The total included 11,030 ounces of gold equivalent ounces at Gold Bar, the company’s only producing mine in Nevada.
Cash costs at Gold Bar were higher than expected at $1,088 per ounce, which McEwen attributed to operational challenges during the first half of this year.
The Toronto-based company continues exploration at Gold Bar, with a 2019 exploration budget at $5 million. McEwen said drilling focused on Gold Bar South in order to advance permitting, with plans to develop that area in late 2020.
“We also drilled two deep holes to test the potential of the property for Carlin-type deposits,” the earnings report states.
In the earlier production announcement on Oct. 17, the chief owner and chairman of McEwen Mining, Rob McEwen, stated that “drilling at Gold Bar South returned several new drill holes showing broad intervals of grades better than twice that of the current resource, which should enhance the project’s economics.”
The San Jose Mine in Argentina, which is 49 percent owned by McEwen, produced 24,415 gold equivalent ounces, compared with 21,676 gold equivalent ounces in 2018. Cash costs were $914 per ounce.
At McEwen’s 100 percent-owned Black Fox Mine in Canada, there was gold production of 7,427 gold equivalent ounces, down from 11,618 ounces in the 2018 quarter due to delays in underground development. Cash costs were $941 per ounce.
Coeur Mining Inc. reported a net loss from continuing operations of $14.3 million in the third quarter, or 6 cents per share, and an adjusted net loss of $5.3 million, or 2 cents per share, while also reporting progress toward 2019 goals, including commissioning of a new crusher unit at the Rochester Mine in Nevada.
“We made significant progress during the third quarter toward achieving our full-year 2019 operational and financial objectives,” said Mitchell Krebs, president and chief executive officer of the Chicago-based company.
The net loss of $14.3 million compares with a new loss of $53 million in the 2018 quarter, and the adjusted loss compares with a loss of $19.7 million in the 2018 quarter, with higher gold and silver sales accounting for most of revenue in the 2019 quarter.
Coeur reaffirmed the 2019 production guidance of between 334,000 and 372,000 ounces of gold, 12.2 million to 14.7 million ounces of silver, 25 million to 40 million pounds of zinc and 20 million to 35 million pounds of lead.
Rochester in Pershing County began processing ore through its new three-stage crushing circuit in the quarter, including the high-pressure grinding roll unit, and Coeur wrote that fourth-quarter results are expected to improve with the circuit in place.
Gold production at Rochester totaled 7,901 ounces in the third quarter, compared with 14,702 ounces last year in the third quarter, and silver production was 982,000 ounces, compared with 1.29 million ounces in the 2018 quarter.
Rochester is Coeur’s only Nevada operation, but the company is exploring at its Sterling and Crown projects in southern Nevada. Coeur also is exploring at Rochester and the Lincoln Hill project four miles to the west.
The company has operations in Alaska, South Dakota, British Columbia and Mexico.
SSR Mining Inc. reported net income of $18.13 million, or 17 cents per share, adjusted attributable net income of $28.4 million, or 23 cents per share, for the third quarter and good news for its Marigold Mine in Nevada.
The net income for the 2019 quarter was up from $2.23 million, or 5 cents per share, in the 2018 quarter and the adjusted net income was up from $10.78 million, or 9 cents per share, according to the earnings report.
The Vancouver-based company also reported companywide gold production of 104,775 ounces at a cash cost of $759 per ounce, compared with 94,808 ounces produced in the third quarter last year. SSR expects to produce 400,000 gold equivalent ounces at cash costs of between $710 and $760 per ounce in 2019.
“We delivered another strong quarter, with increased production at lower cash costs, which positions us well to meet or exceed guidance for the eighth consecutive year,” said SSR President and Chief Executive Officer Paul Benson.
“Our strong operating performance resulted in improved margins, earnings, operating cash flow and free cash flow. Notably, we have an incredibly strong financial position with over a half a billion dollars in cash and marketable securities,” he said in the earnings announcement.
SSR reported plans to extend the Marigold mine life into the 2030s with exploration success at the Red Dot deposit. Marigold received a record of decision from the U.S. Bureau of Land Management on Oct. 30 to expand mining at the Mackay open pit resource complex that includes Red Dot.
SSR also improved opportunities at Marigold earlier this year by purchasing 21,992 acres at Trenton Canyon and Buffalo Valley from Newmont Goldcorp and Fairmile Gold Mining for $22 million. SSR stated that exploration began in the third quarter at Trenton Canyon, which is south of and adjacent to Marigold.
Marigold at Valmy produced 52,968 ounces of gold at lower cash costs of $822 per payable ounce sold, compared with 58,459 ounces in the 2018 quarter at a cash cost of $711 per ounce
Seabee Gold Operation in Canada produced a record 32,345 ounces at a record low cash cost of $373 per ounce of gold sold under SSR Mining Management, up from 27,831 ounces in the third quarter of last year at a cash cost of $447 an ounce.
Puna Operations in Argentina produced 1.7 million ounces of silver at cash costs of $14.22 per ounce, compared with 666,000 ounces for SSR in the 2018 quarter. The company also acquired the remaining 25 percent interest in Puna, increasing production for SSR.
Alio Gold Inc. reported a net loss of $127 million, or $1.50 per share, in the third quarter, including $119.2 million in impairments to mineral properties and assets, but the company was optimistic about improvements at its Florida Canyon Mine in Nevada.
The net loss compared with a loss of $3.72 million in the 2018 quarter, or 4 cents per share.
The company reported gold production totaling 17,787 ounces in the quarter, compared with 23,606 ounces in the 2018 quarter. The average realized gold price was $1,375 an ounce, up from $1,271 last year.
“In the third quarter, the company was challenged by the continued low overall availability of the aged mine fleet at the Florida Canyon Mine,” said Mark Backens, president and chief executive officer of the Vancouver-based company, who said new mining equipment has since been acquired.
“We announced in early October the acquisition of a new loading and haulage fleet for Florida Canyon. This new equipment, a significant portion of which is already in operation, will have an immediate, meaningful positive impact on operations,” he said. “Mine fleet availabilities in the third quarter were below 50 percent, and frankly, we did well to operate at roughly an operating cash flow neutral position,” he said in the earnings report.
Bracken said that the company expects the fourth quarter to see increased mine tonnage to “set the stage for improved production and cash generation in 2020” at Florida Canyon, which is just off Interstate 80 at Imlay.
“Our priority over the next few quarters is to demonstrate the true value of Florida Canyon, and we are allocating resources in line with that vision,” he said.
Work continues at Florida Canyon to optimize operations and to complete construction of a storm water diversion channel in the fourth quarter for a phase II leach pad. Final approvals for the new leach pad came on Oct. 2, according to the company.
The company took over Florida Canyon when it acquired Rye Patch Gold Corp in May of last year. Rye Patch restarted the mine in 2017.
Alio Gold has stopped mining at its San Francisco Mine in Mexico but is leaching low-grade stockpiles, and the company has curtailed activities at the development stage Ana Paula project in Mexico. These actions led to the impairment charges in the third quarter.