Newmont production set to rise next year

Gold mining major Newmont Corporation has announced guidance for 2022 and beyond.

Newmont production set to rise next year

The company expects to produce 6.2 million ounces of gold next year at 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 is due to increased production at Boddington in Western Australia and Ahafo in Ghana.

A 5% cost escalation is built into guidance for labour, energy, material and supplies.

Total production including other metals is expected to be 7.5Moz of gold equivalent.

Attributable sustaining capital guidance is $925 million for 2022, while attributable development capital guidance is $1.2 billion.

"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," Newmont CEO Tom Palmer said.

"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."

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.

Development capital expenditures include spend for Tanami Expansion 2, Ahafo North, Yanacocha Sulfides, Pamour at Porcupine and Cerro Negro District Expansion 1.

Canaccord Genuity analyst Carey MacRury said the 2022 and longer-term guidance was in line with forecasts.

He maintained a buy rating and $64 price target.

Shares in Newmont last traded at $53.27, valuing the company at $42.5 billion.

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