The first quarter financial results from Newmont Corp have again confirmed the world’s biggest gold miner can’t do without its two big Australian mines – Boddington in WA and the about to be expanded Tanami in the Northern Territory.
Newmont posted a fall in first-quarter profit on a 5% rise in revenue as it was hurt by lower gold sales volumes – but not from Boddington which is now the flagship mine for the world’s Number 1 gold miner.
Miners generally have been dealing with labour disruptions and movement restrictions in the two years of the Covid pandemic and its various waves – iron ore, gold, copper, silver, coal, nickel – the entire mining industry has suffered from the impact of the virus.
In fact, Newmont saw its Tanami mine locked down briefly in 2021 and Boddington also took a hit, though from difficult mining conditions, bad weather and technical problems with a new mining system hit output last year.
But the Aussie performance picked up, especially at Boddington while Tanami encountered lower ore throughput. But while a solid production performance was reported from the Australian mines, more important for Newmont was the slide in the All In Sustaining Costs (the most important cost metric in mining) in Australia to $US974 an ounce of gold from $US1,104 an ounce a year earlier. That was the lowest cost outcome for any of the company’s mines in the three months to March
After a solid January, February saw Newmont warn that Omicron-related issues could impact its gold production by as much as 150,000 ounces in the three months to March – as it was output fell by 8% or more than 100,000 ounces.
Newmont produced 1.34 million attributable ounces of gold in the March quarter and 350,000 attributable gold equivalent ounces from co-products (silver and copper mostly).
The 8% year-on-year dip in attributable gold production was mainly due to lower mill throughput at several mines, including Tanami, and was partially offset by higher ore grade milled at Boddington and higher production at Yanacocha in Peru, Newmont said in its quarterly report.
The company’s net income from continuing operations fell to $US432 million, from $US538 million in the first quarter of 2021, but that disguised the higher contribution from the two Australian mines, especially Boddington which was the most profitable mine in the quarter for Newmont.
Newmont reported total revenue for the quarter of $US3.023 billion, up from $US2.892 billion a year ago as higher gold prices provided a boost, while copper chipped in with a solid contribution.
Total revenue from the two Australian mines jumped 29% in the March quarter to $US666 million from $US515 million in the same period of 2021. The Australian mines contributed 22% of group revenues for the quarter.
Earnings before, tax jumped 32% to $US292 million from $US217 million a year earlier and accounted for well 46% of the pre-tax profit earned by the company in the quarter of $US628 million.
Boddington, near Perth stood out with revenue from gold and copper leaping 64% to $US480 million in the quarter from $US296 million in the first three months of 2021.
That was off the back of a sharp rise in gold and copper production from the mine in the quarter.
Tanami saw revenue ease from to $US186 million from $US219 million a year ago as gold production fell.
The two Australian mines produced 282,000 ounces of gold in the quarter up from 262,000 ounces a year earlier and 51,000 tonnes of copper (from Boddington) up 59% from 32,000 tonnes a year earlier.
Boddington produced 182,000 ounces of gold in the quarter, up from 152,000 ounces. Newmont said Boddington produced 19 million pounds of copper against 14 million pounds a year earlier.
Tanami saw output dip 15% to 100,000 ounces from 117,000 ounces.
Including copper the two mines produced 350,000 ounces of gold equivalent, up from 317,000 a year ago.
Newmont is sticking to the gold production forecast of 6.2 million ounces, despite the 8% fall in the first quarter.
Strong performances are again expected from the two Australian mines.
