New­mont’s strong sec­ond quar­ter, which in­cluded $US698 mil­lion in ad­justed EBITDA, has set it up for a big sec­ond half.

The Australian Mining Review - - NEWMONT: BODDINGTON -

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.

Com­mu­nity Fo­cus

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