Newmont says it is withdrawing its full-year 2020 guidance after placing four of its operations into temporary care and maintenance mode in response to the global COVID-19 pandemic.
The company said these actions could see some production deferred into 2021, potentially impacting costs in 2020 if the suspensions continue for an extended period. This meant its guidance of 6.4 Moz of gold at an all-in sustaining cost of $975/oz for 2020, given in early January, would no longer stand.
For the March quarter, Newmont said it expected to produce some 1.4 Moz of attributable gold and around 325,000 of “co-product gold equivalent ounces”. Year-to-date through February 29, Newmont had produced around 981,000 oz of attributable gold and some 227,000 co-product gold equivalent ounces, it said.
“Newmont continues to work proactively with logistics partners and refiners to transport and refine product in a challenging environment,” it said. “We are not currently experiencing significant delays in the shipping of concentrate or transportation and refining of doré, but they may occur in the coming days and weeks if certain government-required shutdowns and border restrictions occur.”
Mines representing around 80% of the company’s production outlook for 2020 continue operating in line with production targets for the year, it said. These operations have implemented heightened levels of health screening, along with support services being conducted remotely.
“If at any point the company determines that continuing operations poses an increased risk to our workforce or host communities, we will reduce operational activities up to and including care and maintenance and management of critical environmental systems,” the company added.
Yet, in order to protect nearby communities and align with travel restrictions or health considerations in Argentina, Canada and Peru, four of its operations are being temporarily put into care and maintenance.
“The operations will be positioned so they can safely and quickly resume normal operations once protective measures have been lifted,” the company said.
The operations being placed into care and maintenance mode includ:
- Musselwhite: Newmont has decided to limit personnel on site to minimise fly-in/fly-out activity to prevent the possible transmission of the virus into communities, including nearby First Nations communities in northern Ontario – essential personnel to maintain infrastructure, continue environmental management and provide security;
- Eléonore (pictured: Credit Osisko Gold Royalties): Newmont has decided to limit personnel on site to comply with the Quebec government’s restriction on non-essential travel within the province and to prevent the possible transmission of the virus into communities, including nearby First Nations communities – essential personnel to maintain infrastructure, continue environmental management and provide security;
- Cerro Negro: Newmont will have to limit personnel on site due to the halt of all domestic flights and mass transportation in Argentina through March 31 – remaining on site will be essential personnel to maintain infrastructure, continue environmental management, provide security and continue ground control activities; and
- Yanacocha: As previously disclosed, mining operations were in the process of safely ramping down due to government travel restrictions in-country, while gold production from leach pads and critical safety, security and environmental management activities continue
Tom Palmer, President and Chief Executive Officer of Newmont, said: “Our business continuity plans and rapid response teams have been fully mobilised in response to the COVID-19 global pandemic.
“We are working closely with host communities, First Nations and other indigenous peoples, regional and national governments and health experts to protect our workforce and nearby communities. This includes putting some operations temporarily into care and maintenance while others continue to operate at targeted production levels.
“We are also making sure that these short-term disruptions do not impact long-term business value while ensuring we are well-positioned to safely and efficiently ramp-up operations in a timely manner once the worst of this global pandemic passes.”
Measures taken at Newmont operations and offices globally include:
- Cancelling all non-essential travel;
- Enhanced temperature and questionnaire screening at entry points to sites;
- Establishing flexible and remote working plans for employees;
- Establishing screening for fly-in-fly-out employees prior to their departures from their home communities;
- Mandatory self-quarantine for anyone who has travelled internationally or has any flu-like symptoms;
- Providing logistical and health care support to nearby communities where needed; and
- Established a global supply chain task force to assess all potential risks and develop viable contingency plans that enable us to stay ahead of any potential supply disruptions.