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Newmont Hikes Guidance For 2018 Gold Production

Newmont Hikes Guidance For 2018 Gold Production

December 6, 2017


Newmont Mining Corp. (NYSE: NEM) Wednesday increased its guidance for 2018 gold production and lowered its estimate for costs, prompting the company’s chief executive to suggest the dividend may be increased as well.


Production guidance for 2018 is now listed in a range of 4.9 million to 5.4 million ounces, up from 4.7 million and 5.2 million ounces previously, reported Newmont, generally regarded as the world’s second-largest gold producer. Output is expected to remain between 4.9 million and 5.4 million ounces in 2019, while longer-term production is expected to remain stable at between 4.6 million and 5.1 million ounces per year through 2022.Guidance for all-in sustaining costs in 2018 was trimmed to between $965 and $1,025 per ounce, compared to the previous range of $950 to $1,050. AISC then is expected to be between $870 and $970 per ounce from 2019 through 2022.


“Our five-year guidance reflects steady performance, portfolio and balance-sheet improvements, and gives us the means and confidence to target a dividend increase of at least 50 percent in 2018,” said Gary J. Goldberg, president and chief executive officer. “We expect to deliver steady gold production at competitive costs over the next five years, and to continue investing in margin and reserve growth.”


The company also produces copper and said output of this metal is expected to remain between 40,000 and 60,000 tonnes in 2018 and 2019, and then increase to between 45,000 and 65,000 tonnes through 2022 as the Phoenix mine moves into different copper zones. Cash costs are forecast to rise to between $1.65 and $1.85 per pound next year, compared to previous guidance, due to lower grades at Boddington and increasing costs at Phoenix as the mine plan focuses on gold-producing zones. These costs are expected to be between $1.80 and $2.20 in 2019 before falling to between $1.40 and $1.80 per pound longer term as Phoenix moves into different copper zones.


The company said its interest expense for 2018 is expected to decrease to between $175 million and $215 million due to lower debt balances, while investment in exploration and advanced projects is expected to increase to between $350 million and $400 million.


The announcement on future guidance comes a day after Newmont reported an agreement to further explore the Esperance gold discovery in French Guiana, owned by Compagnie Miniere Esperancae. The agreement entitles Newmont to earn up to a 70% interest in the property through multi-year investments.


“We continue to strengthen our long-term growth pipeline in promising exploration districts. Our agreement with CME allows us to build our business in the highly prospective Guiana Shield, where we completed the Merian mine safely, on schedule and 20% below budget just over a year ago,” Goldberg said.