Soaring COVID-19 cases are weighing on Newmont's Argentine and Peruvian mines, with impacts expected to linger throughout 2021.
Latin America’s top gold miner was forced to suspend operations twice at Cerro Negro in Argentina (pictured) in Q1 amid surging infections, with Yanacocha in Peru suffering continued impacts from the pandemic.
Argentina has seen a steep rise in new cases, with more than 20,000 reported daily since mid-April, while in Peru the increase has been more gradual, to around 9,000 cases daily in the past seven days.
“South America has been the region most affected by the virus and we continue to see the most significant impacts in Argentina and Peru,” COO Rob Atkinson told the Q1 earnings call.
Newmont – which also has mines in North America, Africa and Australia – remains focused on safety protocols to protect the health of workers and communities as it continues to mitigate the impact of travel restrictions caused by the virus, he added.
While Newmont’s guidance does not include suspensions, the company expects adverse effects from the virus to continue on its operations, amid lagging vaccination rates.
“We do expect impacts due to COVID-19 to continue for some time until vaccines are available and being administered in large quantities,” the COO added.
At Cerro Negro, mitigation efforts are focused increasing camp capacity and installing a new team to manage complex shift changes, along with screening and quarantine of infected workers
The company has experienced significant challenges at Yanacocha, Atkinson added.
“Due to the pandemic productivity will likely be impacted throughout the year,” he said.
MEXICO HOLDS STEADY
In Mexico, Newmont expects steady, strong performance at Peasquito during 2021, with only muted COVID-19 impacts.
“Mexico as a country is still struggling with the virus, but we have got very good protocols in place throughout that country,” CEO Tom Palmer told the call.
LATAM OUTPUT
Attributable production in Latin America was 443,000oz gold, compared to 446,000oz in the same quarter last year.
Peasquito produced 178,000oz, up from 116,000oz, on higher grade and mill throughput.
Newmont’s 40% share in production at Pueblo Viejo in the Dominican Republic, operated by 60% owner Barrick Gold, was 91,000oz, down from 95,000oz.
Yanacocha (51.35% owned by Newmont) produced 32,000oz, down from 63,000oz on lower leach pad production and throughput, due to the ramp-down of the mill.
Newmont’s 75% of output at the Merian mine in Suriname was 86,000oz, down from 100,000oz, on lower grades, while Cerro Negro in Argentina produced 56,000oz, down from 72,000oz, as a result of limited ore availability due to COVID-19 restrictions.
EARNINGS
Newmont reported adjusted net income of US$594mn for Q1, up from US$326mn in the same quarter last year.
Revenue was up 11% at US$2.87bn on higher metals prices, partially offset by lower sales volumes.
Capex increased to US$399mn from US$328mn.
The company produced 1.46Moz gold, down from 1.48Moz.