Newmont’s share of JV gold totals 344,000 ounces
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Newmont’s share of JV gold totals 344,000 ounces

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Newmont Goldcorp portfolio

Newmont Goldcorp Corp. on Tuesday 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 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 Tuesday that 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 billion 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 Penasquito 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 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 Penasquito, 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.

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