Consolidation boosts output of top LatAm gold miners

Consolidation boosted output of the biggest gold miners in Latin America in Q1, despite operational disruptions stemming from the COVID-19 pandemic.

Combined output of the region’s top five yellow metal producers was 1.14Moz, up from 975,000oz by the same companies in 1Q19, according to figures compiled by BNamericas.

Numbers were boosted by Newmont’s acquisition of Goldcorp – previously the largest gold miner in Latin America – last year, while the remaining four companies reported declines.

Three of the five were impacted by suspensions resulting from pandemic-related lockdown measures in Argentina, Peru, Brazil and Mexico.

The overall impact of the coronavirus appears likely to be muted, with original guidance still in place for two of the five and output by the remaining three falling modestly below original expectations.

TOP FIVE

1. Newmont. Q1 LatAm gold production: 446,000oz

The acquisition of Goldcorp last year pushed gold output from Latin American assets to 446,000oz in Q1 from 185,000oz in the same quarter last year.

Peñasquito in Mexico produced 116,000oz gold with Cerro Negro in Argentina contributing 72,000oz.

Attributable output was 95,000oz at Pueblo Viejo in the Dominican Republic (40%), 100,000oz at Merian in Suriname (75%) and 63,000oz at Yanacocha in Peru (51.35%).

2020 OUTLOOK

Newmont withdrew 2020 guidance in March following coronavirus-related suspensions at mines including Cerro Negro, Yanacocha and Peñasquito.

While operations are resuming at the first two, Peñasquito remains suspended, with Newmont eyeing a restart later in May.

Performance in Q1 suggests output may fall only slightly below guidance, if the Mexican mine is quickly restarted, with attributable Latin American output originally forecast at 1.92Moz, or an average of 480,000oz per quarter.

2. Barrick Gold: 218,000oz

Output declined from 253,000oz in 1Q19 as a result of the closure of the Lagunas Norte operation in Peru last year.

Attributable output at Pueblo Viejo in the Dominican Republic (a 60:40 JV with Newmont) was 5,000oz lower at 143,000oz on lower grades, while Veladero in Argentina (a 50:50 JV with Shandong Gold) saw a 5,000oz increase to 75,000oz on higher recoveries.

2020 OUTLOOK

Production in Q1 is tracking ahead of 2020 guidance at Veladero of 240,000-270,000oz, and toward the upper end of guidance at Pueblo Viejo of 530,000-580,000oz.

Barrick has not seen any significant disruption to operations from the COVID-19 pandemic but lowered companywide 2020 forecasts by 0.2Moz to 4.6-5.0Moz due to the suspension of its Porgera mine in Papua New Guinea after the government withdrew a permit.

3. Industrias Peñoles: 207,000oz

The Mexican miner saw output fall from 220,000oz in 1Q19, partly due to lower production from the Herradura and Noche Buena operations, run by precious metals subsidiary Fresnillo.

2020 OUTLOOK

While the vast bulk of mining operations in Mexico have been suspended to comply with lockdown measures, Peñoles and Fresnillo appear to have secured an exemption.

No suspensions have been reported by the companies, with Fresnillo saying on April 29 that talks with the government aimed at continuing limited operations remain ongoing.

Peñoles does not issue guidance, but Fresnillo’s Q1 production of 197,000oz – the majority of Peñoles’ gold output – tracks slightly below its 2020 forecast of 857,000oz gold, although this was due to lower volumes of ore processed and higher stripping at Herradura in line with the mine plan at the company’s biggest gold producer.

4. AngloGold Ashanti: 140,000oz

AngloGold saw output slide to 140,000oz from 165,000oz at its Latin American operations, in part reflecting COVID-related suspensions at its Serra Grande mine in Brazil and Cerro Vanguardia in Argentina.

Output was also down due to lower grades and geotechnical issues in the underground mines in Brazil.

2020 OUTLOOK

AngloGold withdrew guidance in March. With the mine suspensions over, the impact of the coronavirus pandemic on production in 2020 is likely to be minimal, resulting in just 11,000oz of lost output in Q1.

5. Yamana Gold: 127,000oz

Yamana’s Latin American output slipped from 152,000oz, partly due to a coronavirus-related suspension at Cerro Moro in Argentina and the sale of the Chapada asset in Brazil last year.

Production increased at Jacobina in Brazil and El Peñón and Minera Florida in Chile.

2020 OUTLOOK

As a result of the COVID-19 disruption, Yamana lowered its guidance to 786,000oz from 857,000oz, an 8.3% drop (figures are companywide, including the Canadian Malartic operation).

Yamana is ramping back up to full operations at Cerro Moro.