Newmont (NEM) Withdraws 2020 View Amid Coronavirus Pandemic
Zacks Investment Research | Mar 23, 2020 10:34PM ET
Newmont Corporation (NYSE:NEM) has withdrawn its 2020 outlook in response to the COVID-19 pandemic. The company said that some of its productions may be deferred into 2021, which can potentially impact costs in 2020 in case the care and maintenance schedule is extended.
For the first quarter, the company expects to produce around 1.4 million attributable gold ounces and 325,000 co-product gold equivalent ounces. From the start of 2020 till Feb 29, it produced roughly 981,000 attributable gold ounces and 227,000 co-product gold equivalent ounces.
To protect nearby communities and align itself with health considerations or travel restrictions in Argentina, Canada and Peru, Newmont is temporarily putting Musselwhite, Eleonore, Yanacocha and Cerro Negro into care and maintenance. Operations in these mines will be positioned in a way that they can be reverted safely and quickly once protective measures are lifted.
Moreover, the company noted that it is well-positioned to efficiently ramp-up mining operations once the worst of the global pandemic passes. Its long-term value proposition remains unchanged as Newmont continues to have the industry-leading gold mineral reserves of 95.7 million ounces.
The company is pro-actively working with refiners and logistic partners to transport and refine products in a challenging environment. While it is not currently witnessing any major delays in the shipping of concentrate or transportation, delays may occur if certain government-required shutdowns and border restrictions are put into effect.
The company also said that if at any point it determines that the continuing operations increase the risks of its workforce or host communities, it will reduce operational activities.
As of Dec 31, 2019, the company had consolidated cash and liquidity of $2.2 billion and more than $5 billion, respectively. This is likely to provide significant support amid the global pandemic.
Newmont’s shares have gained 19.3% in the past year against the Original post
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