Gold Mining's Future: Key Trends and Challenges

Current and Future Demand for Gold

Gold demand is robust, evidenced by Newmont's expansion plans to boost production and reduce costs, recent price increases, and higher realized prices. Additionally, governmental programs like the Bank of Ghana's gold purchase initiative further underscore sustained and growing demand for gold.

"The expansion is expected to increase average annual gold production by approximately 150 to 200 thousand ounces per year for the first five years and reduce operating costs by approximately 30 percent, bringing average all-in sustaining costs to $900 to $1,000 per ounce for Tanami (2028 - 2032)." --- (NEM, press release, 2024/04/25)

"LAS VEGAS, June 05, 2024 (GLOBE NEWSWIRE) -- Global Financial Markets Communications News Commentary - Recent months have seen the gold price move decisively into a higher trading range, and momentum return to the precious metals mining sector following three years of consolidation." --- (NEM, press release, 2024/06/05)

"In 2021, the Bank of Ghana created a gold purchase program in the effort to stabilize the local currency and build up gold reserves through domestic gold purchases conducted in local currency at prevailing market rates." --- (NEM, sec filing, 2024/Q1)

"Average realized gold price was $2,090, an increase of $86 per ounce over the prior quarter." --- (NEM, press release, 2024/04/25)

"Consolidated cash from operations before working capital5 increased 86 percent from the prior quarter to $1.4 billion primarily due to higher realized gold prices, lower CAS and lower Newcrest transaction and integration costs." --- (NEM, press release, 2024/04/25)

Technological Advancements in Gold Mining

Newmont Corporation is focusing on technological advancements by forming a strategic alliance with CAT to develop an all-electric autonomous mining system, aiming for zero emissions. This initiative highlights the industry's shift towards integrating advanced technology to enhance sustainability and efficiency in gold mining.

"Our President and CEO, Tom Palmer, joined the Precious Metals Market: Global Trends and Prospects panel @snmpeperu’s annual meeting, where he shared insights into how global megatrends in society, technology and geopolitics are impacting #mining. View Tom’s takeaways below ⬇️ https://t.co/R4Ai0Meypj" --- (NEM, Twitter post, 2024/05/24)

"Additionally, as part of our ESG initiatives, in November 2021, Newmont announced a strategic alliance with CAT and pledged a preliminary investment of $100 with the aim to develop and implement a comprehensive all-electric autonomous mining system to achieve zero emissions mining." --- (NEM, sec filing, 2024/Q1)

Cost Management Strategies in Gold Mining

Newmont's cost management strategies focus on monitoring and controlling Cost Applicable to Sales (CAS) and All-In Sustaining Costs (AISC). For Q1 2024, CAS was $1,177 per ounce, while AISC was $1,576 per ounce. These metrics are crucial for evaluating and managing operational efficiency and profitability.

"Costs applicable to sales per gold ounce for Nevada Gold Mines (NGM)
Three Months Ended March 31,
2024
2023 Cost applicable to sales, NGM (1) $ 314
$ 286 Gold sold (thousand ounces), NGM
267
258
Costs applicable to sales per ounce, NGM (2) $ 1,177
$ 1,109
(1) Excludes Depreciation and amortization and Reclamation and remediation." --- (NEM, press release, 2024/04/25)

"produced 1.4 million ounces of gold at $1,378 an ounce. Our Tier 1 portfolio also produced over 480,000 gold equivalent ounces from copper, silver lead and zinc." --- (NEM, earning call, 2024/Q1)

"Three Months Ended March 31, Increase (Decrease) Percent Change 2024 2023 Gold $ 502 $ 388 $ 114 29 % Copper 46 9 37 411 Silver 44 25 19 76 Lead 14 7 7 100 Zinc 36 24 12 50 Other 12 8 4 50 $ 654 $ 461 $ 193 42 % The increase in Depreciation and amortization during the three months ended March 31, 2024, compared to the same period in 2023, is primarily due to the impact of sites acquired in the Newcrest transaction, which contributed $145 to Depreciation and amortization." --- (NEM, sec filing, 2024/Q1)

"Nevada Gold Mines (NGM) attributable gold production was 264 thousand ounces, with CAS of $1,177 per ounce3 and AISC of $1,576 per ounce3 for the first quarter." --- (NEM, press release, 2024/04/25)

"All-in sustaining costs per ounce amounts are calculated by dividing all-in sustaining costs by gold ounces or gold equivalent ounces sold." --- (NEM, sec filing, 2024/Q1)

Sustainability Initiatives in Gold Mining

Newmont is committed to sustainable and responsible mining, as highlighted in their 2023 Sustainability Report. Their initiatives include reforestation, water stewardship, and a broader focus encapsulated by the theme "More Than Gold." Insights from their CFO further emphasize the company's dedication to sustainability.

"Founded in 1921, the company and has been publicly traded since 1925. At Newmont, our purpose is to create value and improve lives through sustainable and responsible mining." --- (NEM, press release, 2024/04/18)

"Founded in 1921, the company has been publicly traded since 1925. At Newmont, our purpose is to create value and improve lives through sustainable and responsible mining." --- (NEM, press release, 2024/06/28)

"This #EarthDay, learn how we’re contributing to a #sustainable future – from reforestation to water stewardship – in our newly released 2023 #SustainabilityReport: https://t.co/6HVEjaqFaG" --- (NEM, twitter, 2024/04/22)

"Hear more from Suzy about what this year’s reporting theme, “More Than Gold,” means to her in our 2023 Sustainability Report: https://t.co/95ULIKWRpD https://t.co/vvDXbz1Zls" --- (NEM, twitter, 2024/04/19)

"As part of our recently published 2023 #Sustainability Report, we sat down with our CFO, Karyn Ovelmen, to get her insights on Newmont’s work – including why she decided to switch industries and join the #Newmont team." --- (NEM, Twitter, 2024/05/02)