Newmont’s strong second quarter, which included $US698 million in adjusted EBITDA, has set it up for a big second half.
AHEAD of Newmont’s Q3 earnings call in late October the outlook was good; attributable global production guidance improved to between 5 million ounces (moz) and 5.4moz, AISC guidance improved to between $US900 and $US950 per ounce; and capital guidance was lowered to between $US890 million and $US990m.
The large multinational also reduced net debt to $US1.5 billion, ending the quarter with $US3.1 billion cash on hand, and an industry-leading, investment-grade credit profile.
In July 2017, it further deleveraged and simplified the balance sheet with the full repayment of $US575m convertible senior notes.
“Operations across the portfolio outperformed, reducing all-in sustaining costs to $US884 per ounce and producing 13 percent more gold on an attributable basis,” Newmont chief Gary Goldberg said in the Q2 report.
“We expect to sustain this performance through strong technical fundamentals and ongoing investment in value-adding technology, and have improved our cost, capital and production outlook as a result.”
In 2017, Newmont’s Australian operations – comprising KCGM, Tanami, and Boddington – were expected to produce between 1.5moz and 1.7moz of gold.
Boddington was also expected to produce between 30,000 tonnes (t) and 40,000t of copper.
Production guidance for Newmont’s Australian operations for 2018 remained at between 1.5moz and 1.7moz, and between 1.4moz and 1.6moz for 2019 as Boddington stripping resulted in lower grades before returning to higher production levels in 2020.
A strong first half saw Australian cost guidance per ounce improve to between $US640 and $US690 on improvements to mining costs at Boddington.
AISC per ounce guidance for 2017 also improved to between $US795 and $US855 on lower cost guidance and sustaining capital improvements. In September, Newmont Mining was ranked overall mining leader by the Dow Jones Sustainability World Index (DJSI World) for an unprecedented third year in a row.
2017 also marked the 11th consecutive year the company had been selected for the DJSI World, which evaluates and ranks the highest-scoring companies on the DJSI – one of the most rigorous and highly regarded sustainability indices in the world.
“This recognition reflects our team’s deep commitment to sustainability and continuous improvement, which translates into safe working conditions and good jobs for employees; sustainable economic development for our host communities; responsible environmental management; and strong returns and growth prospects for our stakeholders,” Mr Goldberg said.
In addition to being ranked the overall industry leader in the metals and mining sector, Newmont received the highest score (100th percentile) in a number of areas including impact measurement and valuation; policy influence; biodiversity; environmental policy and management systems; water-related risks; asset closure management; corporate citizenship and philanthropy; and labour practice indicators.
Newmont also achieved the metals and mining industry’s best overall scores in the economic, environmental and social dimensions.
The Boddington operation alone paid $40m in WA State taxes and royalties in 2016, and spent $178m on wages and benefits for more than 1039 full time workers and 838 contractors.
It also invested in community initiatives, including a partnership with the Shire of Boddington to support the resourcing and operations of the community Early Learning Centre and vocational traineeships through the Boddington Community Resource Centre.
Across Australia, Newmont’s local procurement target across all operations was increased to $96 million for 2017, reflecting a re-evaluation and reassessment of the insourcing at Boddington based on opportunities identified within the context of the 2017 regional business plan.
Each site has an individual target to increase its Indigenous workforce in 2017, with Boddington including a commitment to establish a vocational pathway for an Aboriginal apprenticeship in 2018.
As the Moorditj Booja Community Partnership Agreement at Boddington reaches the midway point of its 20-year term, Newmont will begin a comprehensive audit of the agreement’s outcomes in 2017 to inform the development of an action plan for the remaining 10 years.
All images: Newmont Mining.
Newmont has been selected for DJSI World for the 11th consecutive year.