![Peru , Dominican Republic , Suriname , Mexico and Argentina Peru , Dominican Republic , Suriname , Mexico and Argentina](https://cdn-www.bnamericas.com/img/flags/ALL.jpg)
Newmont worried about COVID spread in Mexico, Peru
![Newmont worried about COVID spread in Mexico, Peru](https://cdnimg.bnamericas.com/WtbliPWNFMwDSKvzeRdeBoGfoNEzVLMDxgrYAoEpnFGcqXNzIgOTSziItRhsUaKe.jpg)
Mexico and Peru are the key countries of concern for Newmont in the ongoing COVID-19 pandemic, as the US gold miner looks to bounce back from a string of suspensions.
Newmont – the biggest gold miner in Latin America – saw attributable output slip to 1.26Moz in Q2 from 1.59Moz in the same quarter last year, due to pandemic-related suspensions at mines including Peñasquito in Mexico, Cerro Negro in Argentina and Yanacocha in Peru.
While restarts are underway at all impacted operations under new health protocols, levels of infection in the community and authorities’ ability to address the health crisis are the main area of worry for CEO Tom Palmer.
“I’m very confident about our ability to manage the risk and the spread of the infection at any one of our operations. The protocols are the same everywhere,” Palmer told the company’s Q2 earnings call.
“My worry is more around the community spread and then the governments needing to take action. Mexico and Peru would be those two countries that we watch carefully.
“But nothing [concerns me] in terms of what is happening at our sites, it’s more about how those countries are managing the health crisis.”
Newmont is keeping COVID-19 protocols in place at all operations, including mines in areas with no community spread such as Boddington in Australia, the CEO said.
In addition to Mexico and Peru, the company is also monitoring the situation in Argentina.
“Those countries are still struggling terribly with this virus, and we are doing everything we can to support our folks in those parts of the world, and part of that is keeping those protocols firmly in place, and ensuring we’re screening folks, we’re keeping up those social distancing and hygiene [measures] and we’re managing the quarantining and contact tracing if we do pick up a case.”
Mexico has the world’s fourth highest COVID-19 death toll at more than 45,000, and regularly reports more than 5,000 new cases daily.
Peru has registered nearly 19,000 deaths, among the highest in Latin America at 570 per million people, while Argentina has seen more than 3,300 deaths and 179,000 cases.
LATAM OPERATIONS
Newmont recorded 279,000oz attributable gold at its Latin American mines in Q2, down 19.6% from 347,000oz a year earlier.
The South America region produced 210,000oz, down from 335,000oz, with Yanacocha, Cerro Negro and Merian in Suriname seeing significant falls, with output steady at Pueblo Viejo in the Dominican Republic, a 40:60 JV with Barrick Gold.
Output at Peñasquito increased to 69,000oz from 12,000oz in 2Q19, when operations were impacted by a blockade.
PRICE BOOST
Despite lower gold production, Newmont posted US$412mn in net income from continuing operations, up from US$1mn, on higher gold prices, an increase in the fair value of investments, lower operating costs and lower transaction and integration costs, partly offset by lower sales volumes from certain sites in care and maintenance and the sale of the Kalgoorlie mine in Australia.
The average realized gold price was US$1,724/oz, up US$407.
Revenue was 5% higher at US$2.37bn, while capex fell 26% to US$280mn.
All-in sustaining costs (AISCs) were US$1,097/oz for gold, up 8% mainly due to care and maintenance costs, partly offset by lower capex.
The company confirmed revised guidance of 6.0Moz gold and 1.0Moz gold equivalent from co-products, at gold AISCs of US$1,015/oz.
Newmont also has mines in Ghana, the US and Canada.
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