Newmont withdraws 2020 guidance

NEWMONT has withdrawn its 2020 guidance after COVID-19 restrictions forced it to put four mines on care and maintenance.
Newmont withdraws 2020 guidance Newmont withdraws 2020 guidance Newmont withdraws 2020 guidance Newmont withdraws 2020 guidance Newmont withdraws 2020 guidance

Newmont's Tanami operation in the NT continues to operate as normal

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The company announced last week it would suspend the Yanacocha mine in Peru to comply with a 15-day shutdown in the country, but will also suspend Cerro Negro in Argentina due to travel restrictions, and Musselwhite and Eléonore in Canada to prevent the transmission of coronavirus into communities.

The company said some of the 6.4 million ounces of gold it previously expected to produce this year could be deferred into 2021.

Guidance for the March quarter is now 1.4Moz of gold and 325,000oz of gold equivalent co-products.

Production up until the end of February was 981,000oz and 227,000 co-product gold equivalent ounces.

"Our business continuity plans and rapid response teams have been fully mobilized in response to the COVID-19 global pandemic," Newmont CEO Tom Palmer said.

"We are working closely with host communities, First Nations and other indigenous peoples, regional and national governments and health experts to protect our workforce and nearby communities. This includes putting some operations temporarily into care and maintenance while others continue to operate at targeted production levels.

"We are also making sure that these short-term disruptions do not impact long-term business value while ensuring we are well-positioned to safely and efficiently ramp-up operations in a timely manner once the worst of this global pandemic passes."

Despite restrictions on travel to remote areas, MNN confirmed last week Newmont's Tanami mine in the Northern Territory was unaffected as workers were flown from Perth, and did not cross Aboriginal lands.

However, Swick Mining Services told the ASX today Newmont had suspended operations at Tanami, resulting in the suspension of Swick's underground diamond drilling contract.

"The suspension of operations at Tanami demonstrates how some state-by-state travel restrictions have the ability to impact rig utilisation and why it is prudent for us to withdraw our earnings guidance," managing director Kent Swick said.

A spokesman for Newmont said operations continued unaffected though exploration had been suspended in line with the Central Land Council's directive.

Newmont's Australian operations, comprising Tanami and Boddington in Western Australia, are forecast to produce 1.2Moz of gold this year.

Newmont said operations representing 80% of 2020 guidance continued to operate, albeit with additional health screening.

The Denver-based company did not rule out suspending further mines if it was determined that continuing operations posed an increased risk to the workforce or host communities.

"We currently have no confirmed COVID-19 cases among our workforce and are taking significant, proactive measures including social distancing at all our sites; removing substantial numbers of non-critical workers from our operations; closing offices with employees working remotely; and stopping all non-essential business travel to ensure we don't become a pathway for transmission to others," Palmer said.

"These are unprecedented times for all industries and while this pandemic brings a lot of uncertainty, Newmont is well-positioned to safely and responsibly generate long-term value for all of our stakeholders."

The company said it wasn't experiencing any delays in shipping of concentrate or transportation and refining of doré.

Newmont had US$2.2 billion in cash at the end of December, as well as over $5 billion of liquidity.

Shares in Newmont rose 2.7% overnight to $41.66 in New York. With a market capitalisation of $33.6 billion, Newmont is the world's most valuable gold producer.

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