With High Prices, Gold Production Levels

With prices well above the average for the previous five years, and with costs creeping up, the top miners in the West process more ore but produce less gold year over year in 2021

By Jesse Morton, Technical Writer

Last year, the top miners in the West milled more ore year over year (YoY) to produce less gold YoY. Total ore milled or processed increased about 4% YoY. Total gold output fell about 1% YoY.

Total gold output for the group in 2021 was about 4% below the average for the preceding half-decade (2016 through 2020).

For the group, the average price received in 2021 (at $1,785/oz) was up roughly 2% YoY, but was about 30% higher than the average for the preceding half-decade.

The average all-in sustaining cost (AISC) for the group in 2021 (at $1,205/oz) was up 16% YoY, and was up roughly 27% over the average for the preceding five years.

For the group, the yield, or the difference between the price and AISC, was $580/oz, a drop of 19% YoY, but 33% above the average for the previous five years.

In their 2021 corporate reports, the group as a whole expressed support for the 2030 Agenda of the United Nations and the World Economic Forum. Generally speaking, the miners declared commitment to the goal of “net-zero greenhouse gas emissions by 2050 or sooner.”

A further glance at the numbers shows that the miners met their guidance for 2021. And going forward, the miners, generally speaking, expect to produce more gold YoY in 2022 amid rising costs. A big merger completed in early 2022 will make that possible and will change the rankings.

Newmont Produces 6 Moz

Newmont’s total gold output increased 1% YoY to roughly 6 million oz (Moz), which was substantially higher than its average for the prior five years (5.6 Moz) and the prior decade (5.3 Moz).

The world’s largest gold miner processed about 2% more ore YoY.

Newmont logged an AISC of $1,062/oz for 2021, up slightly YoY. The AISC for 2021 was up 12% over the average for the previous five years. It reported receiving $1,788/oz, up about 30% over the average for the preceding five years.

The miner reported progress on near-term projects at Tanami Expansion 2, Ahafo North and Yanacocha Sulfides in 2021.

Newmont paid a whopping $1.8 billion in dividends in 2021.

In Q1 2022, Newmont announced the acquisition of Buenaventura’s interest in Minera Yanacocha, Peru’s largest gold mine.

Newmont expects to spend $1.4 billion on development in 2022. The midpoint for guidance for 2022 for total gold output is 6.2 Moz at roughly $1,050/oz. That is 1 Moz more than the company’s average for the previous 10 years.

The miner has “reserves of 93 Moz gold and 65 Moz gold equivalent, as well as resources of 101 Moz gold and 104 Moz gold equivalent.”

Barrick Produces 4.4 Moz

Barrick Gold’s production, while meeting guidance for the third year running, fell 7% YoY and was down 13% from the average for the previous five years.

It processed only 1% more gold ore YoY and 5% more ore than the average for the previous five years. It mined about the same amount of ore YoY.

It’s AISC/oz for 2021, at $1,026/oz, was among the lowest for the group and was up 6% YoY and up 24% over the average for the previous five years. The average received price in 2021 was up 1% YoY and up almost 30% over the average for the previous five years.

In Q4, Nevada Gold Mines (meaning Carlin, Cortez, Turquoise Ridge, Phoenix and Long Canyon combined) pro-
duced roughly 1 Moz total (or 600,000 oz attributable), its highest quarterly production total since formation. Total and attributable annual production by Nevada Gold Mines was down 4% YoY.

After “new discoveries of deposits with different model styles hosted in unconventional rocks,” the company invested in exploration in Canada in 2021. In Tanzania, it tallied roughly 500,000 oz gold from two mines that were “moribund” when acquired in 2019. Kibali, in the Democratic Republic of the Congo, produced roughly 800,000 oz.

Barrick paid quarterly dividends in 2021 and, in Q4, introduced a performance dividend policy as well as a $1 billion share-buyback program.

Barrick has attributable “proven and probable mineral reserves of 69 Moz at 1.71 grams per metric ton (g/mt), increasing from 68 Moz at 1.66 g/mt in 2020.”

The midpoint of its guidance for gold production for 2022 is 4.4 Moz, down about 27% from its average for the previous 10 years. AISC is expected to be $1,080/oz. It anticipates spending as much as $1.55 billion on sustaining its operations in 2022.

Polyus Produces 2.7 Moz

Total gold doré production for Polyus fell slightly YoY. It was 12% above the average for the preceding five years.

The Russian miner processed 6% more ore YoY, and 31% more ore than the average for the preceding five years.

Olympiada produced about 1.1 Moz gold in 2021, up 8% YoY. It mined less ore YoY and processed lower grades. This was complemented by “higher production volumes at Natalka and Verninskoye.” Those mines increased total gold production YoY by 10% and 7%, respectively. Natakla produced 500,000 oz gold in 2021.

Of the group, Polyus reported receiving the highest price ($1,798/oz) and having the lowest AISC in 2021.

For 2022, the miner plans to launch “construction of Mill-5 at Blagodatnoye and the throughput capacity expansion at Kuranakh.”

Polyus anticipates producing roughly 2.8 Moz gold in 2022. In its year-end corporate presentation, released in February, it reported ore reserves of 104 Moz.

AngloGold Ashanti Produces 2.5 Moz

AngloGold Ashanti’s total gold output was down about 12% YoY and down about 27% from the average for the previous five years. It processed substantially less ore YoY.

“Production was lower mainly due to the company undertaking significant reinvestment across key assets, the temporary suspension of underground mining activities at Obuasi, the direct impact of COVID-19 in the first half of 2021, and secondary impacts of the pandemic, including on the mobility of labor, across the full year,” the miner said.

Total gold output at Iduapriem and Obuasi, in Ghana, was down 27% and 15% YoY, respectively. In Tanzania, output at Geita was down 22% YoY.

For 2021, the miner reported an AISC of $1,355/oz, among the highest of the group. Rising from $1,059/oz in 2020, it was the biggest YoY increase in AISC for the group. The cost increases were due to “lower gold production, the drawdown of ore stockpiles at certain operations, higher operating costs and inflationary pressures.”

The average price received for 2021 for the miner was $1,796/oz, among the highest in the group.

In 2021, at Obuasi, Phase 2 construction was completed, and Phase 3 launched. Mining recommenced there in January 2022.

The miner also signed a definitive agreement to acquire Corvus, which closed in January 2022. The move was designed to consolidate “much of the largest new gold district in Nevada.”

The miner plans to develop the North Bullfrog deposit, previously owned by Corvus, prior to developing the Silicon deposit and the Merlin deposit.

The miner anticipates producing roughly 2.7 Moz in 2022 at an AISC of $1,360/oz.

“The AngloGold Ashanti mineral resource reduced from 124.5 Moz in December 2020 to 123.2 Moz in December 2021,” the miner reported. Its ore reserve “increased from 29.7 Moz in December 2020 to 29.8 Moz in December 2021.”

Gold Fields Produces 2.3 Moz

Gold Fields had a solid year in 2021, producing 5% more gold YoY and 9% more gold than the average for the previous five years.

In South Africa, “gold production at South Deep increased by 29%” YoY, to roughly 300,000 oz, the miner said.

The miner processed roughly the same amount of ore YoY in 2021. It reported receiving a price of roughly $1,794/oz, up 30% over the average for the previous five years. It logged an AISC of $1,063/oz, up 9% YoY and up 11% over the average for the previous five years.

“Our Salares Norte project remains largely on track, with the project achieving total completion of 63% at the end of the year,” Gold Fields reported. “As previously guided, we expect first gold production by the end of Q1 2023.”

The midpoint for 2022 guidance for total gold output is 2.3 Moz. The miner anticipates an AISC of $1,160/oz in 2022. Its attributable resources fell 4% YoY to 111.1 Moz, and its reserves fell 7% YoY to 48.6 Moz.

Kinross Produces 2.1 Moz

Kinross produced 13% less gold YoY. Total gold output was down almost 20% from the average for the preceding five years.

The decrease in total gold output “was mainly due to the temporary suspension of milling operations at Tasiast as
a result of a mill fire in June 2021 and deferred mining activities at Round Mountain after wall instability was detected in Q1 2021,” the miner said. “The decrease was slightly offset by increases in production at Fort Knox and at Bald Mountain.”

Total ore processed fell slightly in 2022 and was down 6% from the average for the preceding five years.

In 2021, Kinross paid $151.1 million in dividends, and repurchased 17.6 million common shares for $100.2 million.

“On December 8, 2021, Kinross announced an agreement to acquire Great Bear Resources and its flagship Dixie project in Red Lake, Ontario, which has significant potential to become a top-tier, large-scale operation,” the miner said.

For 2021, the miner reported a receiving price of $1,797/oz. It logged an AISC of 1,138/oz, up 15% YoY.

The miner anticipates producing 2.7 Moz in 2022 at an AISC of $1,130/oz. “Kinross increased proven and probable mineral reserve estimates to 32.6 million Au oz, adding 2.7 million Au oz in 2021, mainly due to additions at Udinsk and Round Mountain.”

The miner reported recently that it plans to sell its Russian assets to Highland Mining (see News, p. 16). company’s Kupol mine was expected to produce 350,000 oz in 2022. Separately, in March, Russia reportedly pegged the ruble to gold.

Agnico Eagle Produces 2 Moz

Agnico Eagle Mines reported record annual production and the highest YoY percentage production gains of the group. It produced 17% more gold YoY and 19% more gold than the average for the preceding five years. That was before the merger.

“The fourth quarter of 2021 was Agnico Eagle’s fifth consecutive quarter of over 500,000 oz of gold production,” the miner said.

The miner processed 14% more ore YoY and 27% more ore than the average for the preceding five years.

In December, Kittila and Canadian Malartic set monthly records for gold production. Annual records for gold production were set at both mines and Meliadine. “LaRonde Complex had its best year ever in terms of tonnage milled,” the miner reported.

In Q4, LaRonde poured its 7 millionth (total to date) oz, and Goldex reached 1 Moz produced since the restart in 2013. “Canadian Malartic reached 6 Moz of gold produced,” Agnico Eagle said.

The miner began merging as “equals” with Kirkland Lake Gold Ltd. (KLG) in 2021. The move was completed in early February.

Former KLG mine Detour Lake produced 700,000 oz in 2021 and is expected to produce 715,000 in 2022. Former KLG mine Macassa produced 200,000 oz in 2021 and is expected to produce 180,000 in 2022. Former KLG mine Fosterville produced 500,000 oz in 2021 and is expected to produce 400,000 oz in 2022.

In 2021, a critical shaft at the Macassa mine was nearly completed well ahead of schedule. For the Kittila expansion project, “the mill expansion was completed ahead of schedule in late 2020 and shaft sinking is expected to be completed in the second half of 2022, with commissioning of the production hoist expected in late 2022 or early 2023.”

For 2021, Agnico Eagle reported receiving $1,794/oz; and had an AISC of $1,038/oz, down slightly YoY.

With the merger complete, the miner anticipates producing in the neighborhood of 3.3 Moz in 2021, which would make it the third largest producer in the group by total gold output. It expects an AISC of $1,025/oz, which could be the lowest of the group.

As of December 31, 2021, KLG had proven and probable mineral reserves of 18.9 Moz, and measured resources of 22.4 Moz. Agnico Eagle had proven and probable mineral reserves of 25.7 Moz and measured resources of 17.3 Moz.

Newcrest Produces 2 Moz

For calendar year 2021, Newcrest produced 9% less gold YoY. The total gold output was down 16% from the average for the previous five years.

For calendar year 2021, Lihir’s total gold output was down substantially. Production there was hit by COVID, a weather stoppage, lower grades going through the mill, and “planned major maintenance shutdowns,” Newcrest said. The mine is currently advancing a project that will make it “a 1 Moz-plus per annum producer from FY24,” Newcrest reported.

Cadia completed a SAG mill motor replacement in calendar year 2021, allowing it to increase production in Q4 by
6% over Q3.

In November 2021, Newcrest agreed to acquire Pretium Resources, which owns the Brucejack mine in the Golden Triangle region of British Columbia. The acquisition could add 300,000 oz per year, Newcrest said.

For calendar year 2021, Newcrest had an average received price of $1,765/oz and an AISC of $962/oz. Both were among the lowest in the group. The miner logged an AISC of $797/oz for the first half of 2021.

The midpoint for guidance for gold production for fiscal year 2022 is 1.9 Moz at an AISC of $1,820/oz. Newcrest’s 2021 fiscal year-end report put its mineral resources at 97 Moz.

Harmony Gold Produces 1.6 Moz

For calendar year 2021, Harmony Gold produced 23% more gold YoY. It beat the average for the previous five years by 26%. It processed significantly more ore YoY.

Similarly, for fiscal year 2021, which ended June 30, 2021, it reported a 26% increase in gold production YoY, a 19% increase in total mineral resources, and a 16% increase in total mineral reserves. Those increases were “mainly due to the inclusion of Mponeng and related assets into our portfolio.”

Mponeng (South Africa) produced roughly 180,000 oz in fiscal year 2021. Tshepong (South Africa) produced 240,000 oz. Moab Khotsong (South Africa), acquired in 2018, produced 230,000 oz.

For 2021, it logged an AISC of $1,515/oz, among the highest of the group, and up 12% YoY. It reported receiving, on average, $1,749/oz, up 9% YoY.

The midpoint of production guidance for 2022 for Harmony is 1.4 Moz at an AISC of $1,448/oz. As of June 30, 2021, the company had attributable gold and gold equivalent mineral resources of 141.2 Moz, and gold and gold equivalent mineral reserves of 42.5 Moz.

Sibanye-Stillwater Produces 1.1 Moz

Sibanye produced 10% more gold YoY. It has increased total gold output three years straight, but the 2021 output was still 10% lower than the average for the previous five years.

“Production from the Beatrix and Kloof operations was impacted by several safety incidents during the year including the suspension of operations at Beatrix 1 and 3 shafts and Kloof 1 shaft on 3 December 2021, which reduced production,” Sibanye-Stillwater said.

The miner processed 8% more ore YoY.

With relatively high gold and platinum prices, the miner logged record revenues in 2021. For gold, in 2021, it received $1,787/oz, up 2% YoY. It logged an AISC of $1,689/oz, up 33% over the average for the previous five years, and the highest of the group.

The midpoint of guidance for gold production for 2022 for Sibanye-Stillwater is 843,000 oz at an AISC of $1,865/oz. It has mineral resources of 74.6 Moz and mineral reserves of 13.1 Moz.