PRECIOUS METALS

Newmont not likely to follow Barrick

NEWMONT Mining CEO Gary Goldberg says the company is not likely to go the way of Barrick Gold in terms of a major deal.

Kristie Batten in Colorado Springs
 Newmont CEO Gary Goldberg

Newmont CEO Gary Goldberg

It was announced on Sunday night that Barrick would acquire Randgold Resources in a US$6 billion nil-premium scrip deal that has been the main talking point of the Denver Gold Forum.

Barrick recently lost its mantle as the world's largest gold producer by market capitalisation to Newmont, though will now reclaim top spot.

Speaking at the event on Tuesday, Goldberg played down any suggestions the company was looking at large deals.

"We've got no need to chase ounces," he said.

"We focused on delivering value, not ounces.

"We plan to stay at the head of the pack in terms of the value we create."

Goldberg said the company was very much focused on organic growth.

"Our project pipeline is among the best in the industry in terms of depth," he said.

Newmont's pipeline has an average internal rate of return of over 20% and return on capital employed of 10.2%.

The company has a seven-year production outlook, with gold output remaining steady at 5 million ounces.

"We're producing the same amount of gold as we did in 2012, but we'll do it with half the people," Goldberg said.

Newmont has a number of advanced projects in its pipeline that aren't in its outlook, including the second expansion at the Tanami mine in the Northern Territory.

"At the end of 2019, we've really got an expansion project or an extension project in each of our four regions," Goldberg said.

Net debt currently stands at US$1 billion, and Goldberg is confident the expansions can be funded through cashflow.

"Right now, that all looks quite manageable," he said.

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