Newmont Corp. will continue to ramp up operations at Peñasquito, Cerro Negro, Éléonore and Yanacocha. Among Newmont’s 12 operating mines and two joint ventures, 13 sites will be fully operational in the coming weeks, the company said.
“We are pleased to be ramping up operations at our four sites previously placed in care and maintenance and we remain committed to protecting our workforce and neighboring communities,” President and CEO Tom Palmer said. “We continue to respond to this pandemic from a position of strength and Newmont’s diverse portfolio in top-tier jurisdictions provides a long-term, stable production profile with the potential to generate significant free cash flow over time.”
Newmont also provided a revised 2020 outlook with nearly all mines operating and mining deemed an essential activity in every jurisdiction where the company operates. The revised 2020 outlook assumes that operations will continue throughout the remainder of the year without major interruptions. Newmont’s long-term guidance remains unchanged with stable production of more than 6 million ounces (oz) and improving costs from 2021 through 2024.
This outlook is near the lower end of the company’s previous outlook. Costs applicable to sales (CAS) is expected to be $775 per oz and all-in sustaining costs is expected to be $1,015 per oz, which were toward the upper range of the company’s previous cost outlook. The revised 2020 outlook includes the production and cost impacts from the five operations temporarily placed into care and maintenance for an average of 45 days. The second quarter is expected to be the lowest production and highest cost quarter of 2020 as the sites ramp up from care and maintenance.
At Peñasquito, activities ramped up on May 18 with a phased approach consistent with the Mexican government’s regulations. Over the next two weeks, the site will implement required hygiene protocols and mobilize key operations and maintenance teams for training. Production is expected to commence in early June.
On March 23, Éléonore was placed into care and maintenance. In early May, Éléonore began ramping up operations and the mill is expected to restart on May 23.
Cerro Negro was also placed on care and maintenance on March 23. In early May, the operation began implementing a safe restart plan and remobilizing its workforce and the mill is expected to start on May 20.
On March 17, Yanacocha ramped down in response to travel restrictions imposed by the Peruvian government. In early May, the operation began remobilizing following the confirmation that the Peru Economic reactivation plan allowed surface mining. The site is implementing a safe restart plan with milling operations starting on May 16 and surface mining activities expected to begin by the end of May.
On March 23, Newmont decided to place Musselwhite into care and maintenance in order to limit the number of people on site and prevent the possible transmission of the virus into the nearby First Nations communities in northern Ontario. Essential personnel continue to maintain infrastructure, provide security and continue environmental management. Musselwhite is the only operation remaining on care and maintenance. Conveyor installation is expected to recommence over the coming weeks.
Newmont continues to progress the majority of its development and sustaining capital projects, including Tanami Expansion 2, developing the sublevel shrinkage mining method at Subika Underground and advancing laybacks at Boddington and Ahafo. However, as a result of COVID-19, total 2020 capital expenditure is now expected to be approximately $1.3 billion due to reductions in non-essential activities and changes to the development capital schedule for Tanami Expansion 2 and Boddington’s Autonomous Haulage, which defers some expenditures to 2021.
For exploration and advanced projects, approximately 80% of the company’s exploration budget is allocated to near-mine with the majority of work suspended in March, the company said. However, Newmont is currently ramping up near-mine drilling programs and preparing to restart Greenfields activities as soon as local restrictions are lifted in French Guiana, Suriname, Ethiopia, Peru, Chile and Australia. The exploration teams have been working remotely focused on improving orebody and district scale models as well as developing risk mitigation plans to restart activities under COVID-19 restrictions. Advanced project study work for Yanacocha Sulfides and Ahafo North continues remotely.
Newmont said it will continue to utilize protective measures for its workforce and neighboring communities, including screening, physical distancing, deep cleaning, and avoiding exposure for at-risk individuals.