Newmont has projected a rise in gold production for 2022 at 6.2 million ounces of gold, with costs applicable to sales of US$820 an ounce and all-in sustaining costs of $1050/oz, based on a gold price assumption of $1800/oz.
The increase in production from 2021 includes current development capital costs and increased production at Boddington in Western Australia and Ahafo mines in Ghana.
The company factors a 5% cost escalation into its guidance or direct costs for labour, energy, material and supplies. Based on projections, total production including other metals is expected to be 7.5Moz of gold equivalent.
The company’s 2022 and longer-term outlook assumes a $30 per ounce impact from production taxes and royalties attributable to higher gold prices. In line with production projections, the outlook assumes operations continue without major Covid-related interruptions.
“If at any point the Company determines that continuing operations poses an increased risk to our workforce or host communities, it will reduce operational activities up to, and including, care and maintenance and management of critical environmental systems.”Newmont Outlook Report
Attributable sustaining capital guidance is $925 million for 2022, while attributable development capital guidance is $1.2 billion.
Newmont CEO Tom Palmer said: “Newmont’s outlook remains strong as we steadily increase production and improve costs over time from our global portfolio of world-class assets located in top-tier jurisdictions.”
“We are entering a period of significant investment in our organic project pipeline, an important component in growing production, improving margins and extending mine life, and we remain focused on delivering long-term value to all of our stakeholders through our ongoing commitment to sustainable and responsible mining.”Tom Palmer, Newmont CEO
Gold Production Expected to Increase through 2026
In the longer-term, production is expected to rise to 6.2-6.8Moz of gold, or 7.7-8.3Moz of gold equivalent. Cash costs should drop to $700-800/oz, while AISC is expected to fall to $920-1020/oz.
Beyond 2022, sustaining capex is forecast at $825 million to $1.025 billion, with 2023 development capex expected to be $1.1-1.3 billion. Over the next five years, development capex is expected to average about $800 million per year. Costs are expected to improve throughout the five-year period with investments in profitable projects and benefits from full Potential improvements.
In 2024, production is expected to increase in the longer-term through 2026 due to the inclusion of profitable production from Ahafo North and Tanami Expansion 2 and reaching higher gold grade at Peñasquito.
Production at Ahafo is expected to increase through 2024 due to higher grade at the Subika open pit and increased underground tonnes mined due to the change in our mining method at Subika Underground. Akyem is expected to maintain steady production in 2022, with lower production expected in 2023 as stripping continues for a new layback. Ahafo North will add profitable production beginning in 2024.
Unit costs at Ahafo are expected to steadily improve due to higher production volumes through 2024. The Akyem unit costs will benefit from steady production in 2022 and increase starting in 2023 due to mine sequencing, Newmont said. Ahafo North will begin to ramp-up in 2024, improving margins through low-cost production.
The company’s outlook reflects a favorable operational year and sustained medium term production capacity, albeit the extent of severity of the Omicron variant may affect this outlook in the next year.