Newmont Gold Corporation recorded an 8 per cent decline in gold output for Q1 2022 to 1.344 million ounces of gold from the prior year, primarily due to lower mill throughput at some of its mines and lower ore grades and a build-up of in-circuit inventory.
While the company’s mines in CC&V, Tanami, Porcupine and Nevada Gold Mines, Pueblo experienced lower mill throughput, it mines at Viejo, Éléonore and Porcupine experienced lower ore grades.
The company’s All-in Sustaining Cost (AISC) per ounce increased 11 per cent to $1,156 per ounce from the previous year’s quarter, primarily due to higher costs applicable to sales (CAS). Gold CAS totaled $1.2 billion for the quarter with per CAS per ounce increasing by 18 per cent to $890 per ounce from the prior year.
Net income from continuing operations attributable to Newmont Stockholders was $432 million or $0.54 per diluted share, a decrease of $106 million from the previous year, due to lower gold sales volumes.
Tom Palmer, Newmont President and Chief Executive Officer, said:
“Newmont delivered a solid first quarter performance with $1.4 billion in adjusted EBITDA as we safely managed through the Omicron surge. The strength of our proven operating model and global portfolio in the world’s best mining jurisdictions is the foundation of Newmont’s clear and consistent strategy to create value and improve lives through sustainable and responsible mining.
“In April, we published our 18th Annual Sustainability Report, which provides a transparent look at our ESG performance and the issues and metrics that matter most to our stakeholders. As a values-based organization and the gold sector’s recognized sustainability leader, Newmont has a long history of leading change in our approach to ESG and our core values are fundamental to how we run our business and where we choose to operate.”
Tom Palmer
In addition, other considerations for the decrease in net income was higher CAS, a pension settlement charge of $130 million, the loss recognized on the sale of the La Zanja equity method investment in 2022 compared to a gain on the sale of TMAC in 2021 and higher reclamation and remediation charges.
Newmont’s Revenue and Realised Gold Price
These notwithstanding, the decreases were partially offset by higher average realized metal prices, unrealized gains on marketable and other equity securities in 2022 compared to unrealized losses in 2021 and lower income tax expense.
The company’s revenue increased by 5 per cent from the previous year’s quarter to $3 billion primarily due to higher average realized gold prices and higher copper sales volumes, which were partially offset by lower gold sales volumes.
Furthermore, Newmont’s average realized gold price was $1,982, representing an increase of $141 per ounce over the prior year quarter. Average realized gold price includes $1,883 per ounce of gross price received. The favorable impact of $17 per ounce mark-to-market on provisionally-priced sales and reductions of $8 per ounce for treatment and refining charges.
However, the company’s operating cash flow from continuing operations decreased 18 per cent from the prior year quarter to $689 million primarily due to lower gold sales volumes and an increase in accounts receivable related to timing of cash receipts.
Giving an update for 2022 operations, the company said its project pipeline supports stable production with improving margins and mine life. Newmont’s 2022 and longer-term outlook includes current development capital costs and production related to Tanami Expansion 2, Ahafo North, Yanacocha Sulfides, Pamour and Cerro Negro District Expansion 1.
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