| Why Newmont Mining’s Production Continues to Grow Steadily | |
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Newmont Mining's Outperformance in 3Q15: Can It Continue? (Continued from Prior Part) Production growth
In the uncertain gold price (GLD) (IAU) environment at the beginning of November 2015, gold miners are trying to increase their production levels at minimal additional costs through productivity and operational enhancements. Newmont Mining Corporation (NEM) is also trying to achieve higher production every quarter. Its gold production was 1,340 thousand ounces in 3Q15, which shows a YoY (year-over-year) increase of 16%. This is also Newmont’s highest output for the past seven quarters.
While Newmont divested some of its assets during the year , its acquisition of CC&V (Cripple Creek and Victor) mine from AngloGold Ashanti (AU) helped the company offset nearly two-thirds of that decline.
Production growth drivers
Operations that helped Newmont drive this strong production performance in 3Q15 included the following:
- The Boddington mine was an operation with full potential improvements that unlocked higher grades, increased mill utilization and recoveries at Boddington, and resulted in a 24% increase in gold production YoY.
- Tanami was an operation that delivered strong production in 3Q15 on the back of higher grades, improved productivity, and increased mill utilization, resulting in a gold production increase of 75% YoY.
- Twin Creeks was an operation that benefitted from improved mill grades and the completion of a planned stripping campaign, causing gold production for the location to increase by 34% YoY.
Strong copper production
Copper production also increased to 48,000 tons in 3Q15 compared to 13,000 tons in 3Q14. However, investors need to note that the same quarter in 2014 was impacted by a temporary export ban from Indonesia.
Higher grades were mined at Batu Hijau, as production reached the higher grade Phase 6. Batu Hijau also operated and shipped at full capacity, which not only led to an increase in production but also helped lower overall costs. Newmont’s management expects its export permit to be renewed by the Indonesian government in coming few weeks.
We should note, however, that this strong growth trend in production is not an experience unique to Newmont in 3Q15. Newmont’s peers, such as Barrick Gold Corporation (ABX), Goldcorp (GG) and Agnico Eagle Mines (AEM), also reported strong production growth in their latest quarterly reports. Newmont Mining (NEM) makes up 6.1% of the holdings of the Market Vectors Gold Miners ETF (GDX).
Continue to the next part of this series for a discussion of Newmont’s strong project pipeline in 4Q15.
Correction: This post originally featured the wrong data for Newmont’s production. We have since revised the post to display the proper graph. We regret this error.
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PRODUCER |
CODE : AU |
ISIN : US0351282068 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
AngloGold is a gold producing company based in . AngloGold produces gold, copper, silver and zinc in Argentina, in Australia, in Brazil, in Canada, in Ghana, in Guinea, in Mali, in Namibia, in South Africa and in Tanzania, develops gold and iron in Australia, in Brazil, in Colombia, in Congo Dem. Rep. of and in South Africa, and holds various exploration projects in Philippines. Its main assets in production are CRIXÁS, MINERAÇÃO, SAO BENTO, ANGLOGOLD ASHANTI MINERAÇAO and CRIXAS MINE in Brazil, SUNRISE DAM GOLD MINE in Australia, NAVACHAB MINE and NAVACHAB in Namibia, YATELA, MORILA and SADIOLA in Mali, CERRO VANGUARDIA in Argentina, MPONENG (WESTERN DEEP NO. 1 SHAFT), TAUTONA (WESTERN DEEP NO.3 SHAFT), BAMBANANI, TAU LEKOA, MPONENG, SAVUKA, TAU TONA, GREAT NOLIGWA, KOPANANG and CRIPPLE CREEK & VICTOR (CRESSON MINE) in South Africa, SIGUIRI in Guinea, TEBEREBIE, IDUAPRIEM, OBUASI and KUBI in Ghana, GEITA in Tanzania and TROUT LAKE MINE and CALLINAN MINE in Canada, its main assets in development are MOAB KHOTSONG in South Africa, MINAS-RIO in Brazil, LA COLOSA and GRAMALOTE in Colombia, KIBALI (KILO-MOTO) in Congo Dem. Rep. of and TROPICANA in Australia and its main exploration properties are HUALATAN and ER in Peru, MKURUMU in Tanzania, 777 PROJECT and RIVARD in Canada, LOUBOUGOULA, GOODPASTER and ALAMOUTALA (SADIOLA II) in Mali, BAMBADJI in Senegal, MORRO VELHO in Brazil and SIANA in Philippines. AngloGold is listed in Australia, in Germany and in United States of America. Its market capitalisation is US$ 9.1 billions as of today (€ 8.0 billions). Its stock quote reached its lowest recent point on November 23, 2018 at US$ 10.00, and its highest recent level on March 28, 2024 at US$ 22.20. AngloGold has 409 109 984 shares outstanding. |