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Argonaut Gold Inc. announced second-quarter adjusted net income of $7.3 million, or 2 cents per share, and production totaling 59,192 gold equivalent ounces, including 14,489 gold equivalent ounces from the Florida Canyon Mine in Nevada.
The second quarter adjusted net income was down from $22.7 million, or 7 cents per share, in the second quarter of last year, and net income was $18.4 million, or 6 cents per share, in the second quarter, compared with $21.8 million, or 7 cents per share in the 2021 quarter.
Revenue for the second quarter of 2022 was $111.4 million, a decrease from $120.2 million in the second quarter of 2021, according to the Toronto-based company that is focused on construction of the Magino Project in Canada.
Argonaut said that during the second quarter, the company sold 57,344 gold ounces at an average realized price per ounce of $1,884, compared to 63,000 gold ounces sold at an average realized price per ounce of $1,812 during the same period of 2021.
Gold ounces sold for the first quarter of 2022 decreased, compared with the same period in 2021 primarily due to fewer ounces produced and sold at the La Colorada and El Castillo mines in Mexico.
The all-in sustaining cost per ounce in the second quarter was $1,474 per ounce, up from $1,203 in the 2021 quarter, according to the Aug. 9 earnings report.
“We were slightly ahead of our operational budget in terms of GEO production during the second quarter, which yielded over 59,000 GEOs, albeit at a slightly higher cost than budgeted due to inflationary pressures on input costs,” said the company’s president and chief executive officer, Larry Radford.
“We recently put a financing package together that we believe fully finances the Magino construction project,” he said, reporting that the company is tracking well against the most recent estimate for completion of Magino of $719.7 million.
“With the financing behind us and what I believe to be the right team now in place, I feel Argonaut is in a much better position to execute on our business plan,” Radford said.
The company also said that higher cash costs of $1,248 per ounce were primarily related to higher mining rates at El Castillo, La Colorada and Florida Canyon at Imlay due to higher strip ratios, higher key consumable costs across all operations and lower gold ounces sold.
Argonaut acquired Florida Canyon on July 1, 2020, from Alio Gold Inc.
The company also said that its guidance for 2022 production remains the same at between 200,000 and 230,000 gold equivalent ounces, but it is adjusting expected costs because of inflationary pressures on key consumable costs. All-in sustainable costs were forecast at $1,415 to $1,525 per ounce but now are at $1,500 to $1,600 per ounce.
Reporting on Magino in Ontario, Argonaut stated that at the end of the second quarter the construction project was roughly 53.8% complete, and indications are that the first gold pour will be delayed from March 2023 to April 2023 because of delay claims from Ausenco for a province-wide strike of several trades that lasted 23 days.
Looking at the first six months of this year, Argonaut reported that revenue for the six months ending June 30 was $217.2 million, a decrease from $225.5 million for the six months ended June 30, 2021.
During the first half, gold ounces sold totaled 111,450 at an average realized price per ounce of $1,879, compared with 119,727 gold ounces sold at an average realized price per ounce of $1,788 during the same period of 2021.
Gold ounces sold for the six months ended June 30 decreased from the first six months of 2021 primarily due to the reduction in gold ounces sold from the La Colorada and El Castillo mines, according to the company.
Net income for the first half of 2022 was $24 million, or 7 cents per share, compared with net income of $48.8 million, or 16 cents per share, in the six months ended June 30, 2021.
Adjusted net income for the first half of 2022 was $15.5 million, or 5 cents per share, a decrease from adjusted net income of $29.7 million, or 10 cents per share, for the first half of 2021.
Barrick Gold Corp.’s adjusted net earnings for the second quarter totaled $419 million, or 24 cents per share, and Barrick reported Long Canyon Mine is not being sold after all. The company also posted Nevada Gold Mines production of 751,000 ounces in the quarter on a 100% basis.
Barrick said that NGM is no longer exploring the sale of the Long Canyon Mine in Elko County but is reviewing ways to optimize the asset’s mine life extension, including required permitting activities. The statement was in Barrick’s management’s discussion and analysis for the second quarter.
Barrick operates NGM and holds 61.5% of the joint venture, and Newmont Corp. holds the remaining 38.5%.
The Long Canyon Mine between Wells and West Wendover is a smaller, open pit operation that Newmont opened six years ago but is now part of NGM. The joint venture stated back in March of this year that it was looking at selling the mine.
Barrick’s president and chief executive officer, Mark Bristow, said in the earnings webinar that Long Canyon didn’t fit NGM’s portfolio for Nevada, so NGM thought the mine might be an opportunity for another company.
However, he said NGM was “not in the frame of a fire sale” for Long Canyon as slipping gold prices impacted a potential sale. He said NGM will now look again at a possible underground mine there.
Barrick’s second quarter adjusted net earnings were down from $513 million, or 29 cents per share, in the 2021 quarter, while net earnings were $488 million, or 27 cents per share, up from $411 million, or 23 cents per share, in the second quarter of last year.
Bristow said in the earnings call that due to the war in Ukraine and crisis in eastern Europe, the company continues to deal with higher energy costs and supply chain problems, but earnings beat analyst estimates.
Zacks Consensus estimate was for Barrick’s adjusted earnings to be 23 cents per share.
Barrick’s averaged realized gold price in the second quarter was $1,862 per ounce, compared with $1,820 per ounce in the second quarter of last year, but prices were heading down toward the end of the second quarter.
Bristow also said Barrick was on track to achieve its gold production forecast for this year of 4.2 million to 4.6 million ounces, and copper production is expected to be between 420 million and 470 million pounds in 2022.
Barrick’s board announced a dividend of 20 cents per share for the quarter, and Graham Shuttleworth, executive vice president and chief financial officer, said in the news release that “on the back of our strong operating performance, we are once again able to provide a leading dividend to our shareholders, whilst still maintaining a strong balance sheet.”
Toronto-based Barrick also reported that during the second quarter the company repurchased $182 million in shares under the $1 billion buyback program introduced earlier this year. Bristow said this was the first buyback since program approval.
The Nevada Gold Mines production of 751,000 ounces for both joint venture partners combined is up from 747,000 ounces produced in the 2021 quarter, with 462,000 of those ounces for Barrick’s 61.5% of NGM.
The 100% production for the NGM operations included: 394,000 ounces from Carlin, up from 373,000 ounces in the 2021 quarter; 158,000 ounces from Cortez, down from 187,000 ounces last year; 122,000 ounces from Turquoise Ridge, up from 109,000 ounces in the 2021 quarter; 43,000 ounces from Phoenix, up from 37,000 ounces in the second quarter of last year; and 34,000 ounces from Long Canyon, down from 41,000 ounces in the 2021 quarter.
Cortez production is expected to be higher in the second half of the year as the mine moves from the Pipeline open pit to Crossroads, and Bristow said there is “very high-grade ore” that will be coming in the fourth quarter.
He said the Turquoise Ridge underground operations are “really doing well now,” and the underground is “ramping up as per the plan.” The third shaft is progressing on time and budget.
Meanwhile, NGM is awaiting a record of decision from the U.S. Bureau of Land Management to start production mining at its Goldrush Project at Cortez, where test ore is already being mined from the underground project. The BLM issued a draft environmental impact statement in the second quarter for Goldrush.
Barrick stated in the earnings report that the decision is expected in the first half of 2023, which is later than had been expected, and Bristow said that “in the U.S. permitting takes time.” He said Barrick, BLM and consultant teams are engaged in the process that is now in the comment period.
Companywide, Barrick produced 1.04 million ounces of gold in the second quarter, just slightly more than in the second quarter of last year, and all-in sustaining costs were $1,212 per ounce, up from $1,087 per ounce in the 2021 quarter.
Copper production totaled 120 million pounds, up from 96 million pounds last year, and all-in sustaining costs were $2.87 per pound, up from $2.74 per pound in the 2021 quarter.
Exploration also continues at NGM operations, and Bristow said there are a “wealth of prospects in Nevada,” including 700,000 maiden inferred resources at North Leeville north of Carlin. The North Turf deposit is heading north toward North Leeville, too.
In the Barrick earnings report, the company said that at existing NGM operations, brownfields exploration is replacing reserves depleted by mining and identifying new targets while the greenfields team is looking for new prospects.
The company additionally stated that North American exploration has extended from Nevada to active projects in Canada, and there is an intensified exploration effort in Latin America, Africa and the Middle East. Bristow also reported that Barrick is remodeling the Hemlo Mine in Canada and considering restarting the open pit mine there.
Bristow said Barrick now has prospects “in nearly all the world’s gold and copper regions,” including Reko Diq in Pakistan, where Barrick will be 50% owner and operator of the proposed mine with a 40-year mine life.
Calibre Mining Corp. announced adjusted net income for the second quarter of $15.48 million, or 3 cents per share, as the company continues to operate and explore mines in Nevada and Nicaragua.
The adjusted net income of $15.48 million was up from nearly $11.89 million, or 4 cents per share, in the second quarter of 2021, and Calibre said net income for the second quarter was $15.4 million, or 3 cents per share.
Gold sales of 59,783 ounces grossed $111.3 million in revenue at an average realized gold price of $1,861 per ounce, the company said.
For the first half of the year adjusted net earnings were $31.9 million, or 7 cents per share.
“Calibre responsibly delivered another record quarter of production. Despite industry-wide inflationary pressures our year-to-date AISC of $1,244 per ounce is favorable to budget, within guidance, and we reaffirm our commitment to deliver on our full year guidance,” said Darren Hall, president and chief executive officer.
He said about Nicaraguan operations that “following receipt of the Pavon Central environmental permit approval during the quarter, we have commenced development works at the high-grade open pit, and Eastern Borosi permitting is progressing well with permits anticipated before year end.
“Our exploration investment continues to yield positive results as evidenced by the bonanza grade drill results at Panteon North at Limon and numerous positive results at Pan and Gold Rock in Nevada. The company is in the strongest financial position ever, with $92 million in cash, and we remain fiscally responsible with the ability to self-fund exploration and organic growth from operating cash flow,” Hall said in the earnings announcement.
Companywide, Calibre produced 59,723 ounces of gold in the second quarter, up from 43,506 ounces in the 2021 quarter. Pan Mine in Nevada’s White Pine County produced 10,913 ounces of gold in the second quarter.
Gold sales in the first six months of the year from operations in Nicaragua and the Pan Mine in White Pine County totaled 112,270 ounces grossing $210.8 million in revenue at an average realized gold price of $1,878 per ounce, the company reported.
All-in sustaining costs for the six months were $1,244 per ounce, with Nicaragua’s at $1,149 per ounce per ounce and Nevada costs at $1,365 per ounce, Calibre said. For the second quarter, all-in sustaining costs were $1,284 per ounce.
In the second quarter, inflationary impacts of increased diesel prices and other commodities negatively impacted cash costs by roughly 5% quarter over quarter, the company said, adding that the higher Nevada costs were also due to budgeted additional waste movement and lower grades.
Calibre is exploring at both the Pan Mine and the Gold Rock Project nearby, and the company earlier this year said that drilling at Pan demonstrated resource expansion and higher-grade potential, while there were high-grade drilling results at Gold Rock.
The U.S. Bureau of Land Management has already permitted Gold Rock as a mine, and the company is completing technical work toward state permitting.
Calibre acquired Fiore Gold and its Nevada properties on Jan. 12 of this year.
The company also stated in the earnings report that its production guidance for 2022 remains the same at 220,000 to 235,000 gold ounces, and Calibre will continue to invest in its drilling program at all assets. Pan’s production is expected to be between 40,000 and 45,000 ounces this year.
Coeur Mining Inc. posted an adjusted net loss of $13.1 million, or 5 cents per share, for the second quarter as the company dealt with cost pressures, lower silver prices and the major construction project at the Rochester Mine in Nevada.
Coeur reported production of 83,772 ounces of gold and 2.5 million ounces of silver in the quarter, down from 87,275 ounces of gold and 2.6 million ounces of silver in the second quarter of last year.
The adjusted net loss compared with a loss of $800,000 in the second quarter of last year, and Chicago-based Coeur stated that the net loss was $77.4 million, or 28 cents per share, mainly because of a non-cash unrealized loss of roughly $63 million due to equity investments.
Revenue in the second quarter was $204 million, down from $215 million in the 2021 quarter, while the average realized price for gold was $1,729 per ounce in the 2022 quarter and the silver price was $22.61. Those prices compare with $1,651 per gold ounce and $26.60 per silver ounce in the second quarter of last year.
“Our second quarter results demonstrate the resilience of Coeur’s multi-asset mine portfolio,” Coeur’s president and chief executive officer, Mitchell J. Krebbs, said in the earnings report. “Despite weaker gold and silver prices, company-wide revenue increased 8% versus the prior quarter due to higher production levels from our Kensington, Wharf and Rochester operations.”
At Rochester in Pershing County, the expansion remains on track for completion in mid-2023, with the total estimated project cost remaining at roughly $600 million as of June 30.
“There are over 400 contractors going through the gate every day now,” Krebs said in the earnings conference call. “And several key milestones were achieved during the quarter, including the completion of major concrete pouring and the start of steel erection at the Merrill-Crowe facility and secondary crusher. Almost all components and equipment are on site now.”
Krebs also said Rochester reached an important milestone a couple of weeks ago with the successful installation of pre-screens at the existing crusher at Rochester. The operations continue at the older site while the construction project continues at the new location.
The Rochester project includes a new 300-million-ton leach pad, the new Merrill-Crowe process plant, and a three-stage crushing circuit.
The estimated cost of $600 million for the Rochester project is up from original projections of a little under $400 million, and Krebs said that “in my mind, there is a kind of bucket of inflation and a bucket of scope enhancements, about 50-50, if I had to say off the cuff.”
The company’s senior vice president and chief operating officer, Michael “Mick” Routledge, said, however, that he could see costs going up 5% over the current estimate because of inflationary pressures.
Routledge said in the call that in the first half of this year Coeur’s teams companywide “worked hard to overcome considerable headwinds on costs and global supply chain disruptions,” and “when we factor in the addition of a major expansion project at one of our four operations, our performance is even more impressive.”
Thomas Whelan, senior vice president and chief financial officer, said in the call that while cost increases other than for diesel have moderated, diesel remains the largest cost for the company, which uses 16 million to 18 million gallons per year.
He said diesel is running roughly $1.50 per gallon over budget, so Coeur has increased cost guidance at Rochester, Kensington in Alaska and Wharf in South Dakota.
Full-year guidance for Rochester is at 3 million to 4 million silver ounces and 35,000 to 43,000 gold ounces at cost of sales of $1,650 to $1,850 per ounce of gold, up from $1,490 to $1,590 per ounce, and $26 per silver ounce, up from $20.75 to $22.75 per silver ounce due to inflationary pressures.
Rochester produced 700,000 ounces of silver and 8,319 ounces of gold in the second quarter, compared with 900,000 ounces of silver and 7,232 ounces of gold in the 2021 quarter.
First Majestic Silver Corp. announced an adjusted net loss of $5.7 million, or a loss of 2 cents per share, for the second quarter mainly because of a drop in silver prices that led the company to reduce capital spending.
“Throughout the second quarter, the silver price continued to experience significant volatility, declining approximately 20% from $25 to $20,” said the Vancouver-based company’s president and chief executive officer, Keith Neumeyer. “As a result of this weakness, the company refocused and successfully reduced its 2022 capital investments without impacting strong growth in projected production.”
The average realized silver price of $23.93 per ounce in the second quarter was down 12% from the 2021 quarter, but the London fix silver price dropped as low as $20.41 per ounce on June 30.
The adjusted net loss of $5.7 million in the second quarter compared with earnings of $12.7 million, or 5 cents per share, in the second quarter of last year, while the company reported a net loss without adjustments of $84.1 million, or 32 cents per share, in the quarter. That compared with earnings of $15.6 million, or 6 cents per share, in the 2021 quarter.
The $84.1 million loss was mostly because of a $78.7 million income tax expense, partially offset by a reversal of an impairment recorded at La Guitarra in Mexico as the mine was classified as an asset for sale following the May announcement that Sierra Madre Gold and Silver Ltd. will buy it for $35 million in share consideration, First Majestic reported.
Revenues in the second quarter totaled $159.4 million, up from $154.1 million in the 2021 quarter, the company stated in its Aug. 4 earnings report. The increase in revenues was primarily attributed to inclusion of a full quarter of production from the Jerritt Canyon mine north of Elko and the processing of the Ermitano ore at the Santa Elena mill in Mexico, partially offset by weaker metal prices, the company reported.
First Majestic also said that the company withheld sales of roughly 200,000 ounces of silver at the end of the quarter that would have generated roughly $5.2 million in additionally revenue at the realized price of $23.93 per ounce.
First Majestic acquired Jerritt Canyon last year and began several projects, such as the connecting the SSX and Smith mines underground, reopening the West Generator underground mine and reopening Saval II.
First Majestic produced a little more than 7.7 million silver equivalent ounces in the second quarter, up from a little less than 6.44 million silver equivalent ounces in the 2021 quarter. The silver equivalent ounces include gold produced at the Jerritt Canyon Mine totaling 18,632 ounces in the second quarter.
“In Mexico, our three operations generated healthy profit margins as approximately 80% of our total production came in at a low AISC (all-in sustaining cost) of $15.34 per ounce. In addition, we expect consolidated AISC to continue to trend lower throughout the next two quarters as production ramps up at Santa Elena and Jerritt Canyon, as well as other inflationary cost saving measures are achieved,” Neumeyer said.
The First Majestic earnings report also included the announcement that the board declared a cash dividend payment of $0.0061 per common share for the second quarter, using the formula that calls for the dividend to equal roughly 1% of the company’s quarterly revenues divided by the company’s then outstanding common shares on the record date.
And the company reported that since the second quarter ended it has repurchased 100,000 common shares as part of its buyback program.
As i-80 Gold Corp. continues to develop several projects in Nevada in anticipation of higher production in the years to come, the company reported gold sales of 3,507 ounces produced at an all-in sustaining cost of $1,356 per ounce in the second quarter.
Chief Financial Officer Ryan Snow said the gold prepay and silver purchase and sale agreements of $75 million funded during the second quarter and gold sales that continued from the residual leaching at Ruby Hill and Lone Tree resulted in a cash balance of $101 million.
The company’s operating loss in the quarter ended June 30 was nearly $15.95 million, according to the report.
“The company continues to aggressively pursue our peer-best production growth strategy,” Snow also said in the earnings report. “Several key development milestones have been achieved in the first half of the year, along with continued exploration success, demonstrating the potential to extend known mineralization.”
Drilling at Granite Creek in Humboldt County continued in the second quarter with multiple high-grade intercepts in the Ogee and South Pacific zones, and i-80 Gold increased the size of the Granite Creek land package by roughly 1,280 acres, extending exposure along the primary fault structure toward Nevada Gold Mines’ Turquoise Ridge underground mine during the quarter.
The company stated that it also continued step-out and infill drilling at Ruby Hill on the outskirts of the town of Eureka with multiple high-grade intercepts and entered into an agreement to acquire key water rights for development of the Cove Project south of Battle Mountain.
Permitting efforts have started for construction of a decline to access from underground the high-grade Ruby Deeps deposit and the Blackjack Zone, with the intent to truck refractory ore for processing at Lone Tree, i-80 said.
Engineering studies for restarting the autoclave at Lone Tree also continued in the quarter, i-80 Gold stated, adding that Lone Tree is expected to become the hub of i-80 Gold’s operations and the central processing facility for ore from its planned projects.
The autoclave study is expected to be completed in the second half of this year, i-80 Gold said, and the company reported it is continuing permitting for development of the Buffalo Mountain open pit, with ore produced from that new mine to be processed at the Lone Tree leach pad facility.
In the first half of the year, i-80 Gold had gold sales of 4,996 ounces at all-in sustaining costs of $1,326 per ounce, began development of an exploration decline at McCoy-Cove, and began shipping sulfide ore from Granite Creek to the nearby Twin Creeks processing facilities operated by Nevada Gold Mines, according to the announcement.
The company reported that now the exploration decline has advanced 1,300 feet and drilling is slated to begin in the fourth quarter.
Kinross Gold Corp.’s adjusted net earnings for the second quarter totaled $37.4 million, or 3 cents per share, down from $66.5 million, or 5 cents per share in the 2021 quarter, but gold equivalent production was up from the second quarter of last year.
The Toronto-based company produced 453,978 gold equivalent ounces in the second quarter, 19% higher than the 381,474 gold equivalent ounces produced in the 2021 quarter, with gold production up at Bald Mountain in Nevada to 54,108 ounces, compared with 36,887 ounces in the 2021 quarter.
Production at Round Mountain Mine in Nevada was down, however, to 56,709 ounces, compared with 67,928 ounces last year. But Paul Tomory, executive vice president and chief technical officer, said in the earnings conference call that Round Mountain “will ramp up to 300,000 ounces a year in 2024.”
Kinross reported that before adjustments the company posted a $9.3 million loss, or 1 cent per share, in the second quarter, compared with net earnings of $30.1 million, or 2 cents per share, in the second quarter of last year. The company attributed the 2022 quarterly loss to a decrease in operating earnings and an increase in income tax expense.
The average realized gold price in the second quarter from continuing operations was $1,872 per ounce, compared with $1,814 per ounce in the 2021 quarter.
Costs companywide rose in the second quarter, and Kinross changed its cost guidance for this year to an all-in sustaining cost of $1,240 per ounce, up from $1,150 per ounce, mainly because of inflationary pressures and the impact of a temporary delay in the ramp-up of the La Coipa mill in Chile.
Kinross President and Chief Executive Officer J. Paul Rollinson said in the call that he was “not happy with the operational results for the first half of this year,” but he said costs will drop in the second half of the year.
The all-in sustaining costs per gold equivalent ounce sold in the second quarter was $1,341 per ounce, compared with $1,150 per ounce in the 2021 quarter.
Inflation is now at 12% for Kinross, and Tomory said prices are high for cyanide, lime and explosives, but other commodity prices are “not as severe as they were,” while labor pressures continue in the United States with high turnover that means the company has to offer higher pay.
He also said the global supply chain has been strained.
Production for the year is expected to be at the low end of the 2022 guidance of between 2.04 million and 2.26 million gold equivalent ounces.
In Nevada, Round Mountain Mine in Nye County is continuing to advance the mine optimization program on schedule for completion this year. Kinross stated that the program is optimizing the mine plan sequence for Phase W that is expected to be divided into four parts.
Mining in the first two parts is ongoing and is expected to continue over the next two or three years, while longer-term scenarios for after 2024 are being analyzed to optimize stripping requirements for the second part, the company reported.
Phase S mining is now expected to start early next year, with permits now in hand, Kinross stated, and the company is evaluating the potential for underground mining for the deeper portions of Phase W and Phase X, with plans for development of an exploration drift at Phase X advancing. Construction is expected to begin in the fourth quarter.
Kinross also is continuing exploration at Gold Hill, northeast of Round Mountain, with drilling confirming multiple deposit-scale trends along strike, and Tomory said both the underground project and Gold Hill “are showing promise.”
At Bald Mountain in White Pine County, production increased mainly due to an increase in ounces recovered from the heap leach pads, with higher grades contributing to the hike, according to Kinross.
Kinross also announced the final decision to develop the 70%-owned Manh Choh Project in Alaska that will provide ore to the nearby Fort Knox Mine for processing and increase the company’s production profile by roughly 640,000 attributable gold equivalent ounces over the life of mine at lower costs.
Tomory said road construction is the priority now, and production is expected in the second half of 2024.
Rollinson also said in the call that 70% of the company’s gold production will now come from the Americas with the sale of the Kinross mining operations in Russia for $340 million to Highland Gold Mining Group and the sale of the Chirano Mine in Ghana to Asante Gold Corp. for $225 million.
Kinross announced a dividend of 3 cents on July 27, and on July 28 announced continuation of its share buyback program for up to 65 million common shares.
Newmont Corp. posted adjusted net income for the second quarter of $362 million, or 46 cents per share, down from $670 million, or 83 cents per share, in the 2021 quarter, and announced gold production of 1.5 million ounces, up 3% over the second quarter of last year.
The company also reported that inflation and other factors led to a revised cost outlook for 2022.
Second-quarter net income from continuing operations attributable to stockholders was $379 million, or 48 cents per share, in the second quarter, down from $432 million in the prior year’s second quarter, with impact from a profit-sharing agreement at the Penasquito Mine in Mexico as one contributor at $70 million.
“Newmont delivered a solid second quarter performance, producing 1.5 million gold ounces and generating $514 million in free cash flow,” said President and Chief Executive Officer Tom Palmer, who said that the Colorado-based company “remains well-positioned to safely manage through the evolving and unprecedented challenges that face our industry and the world at large.”
Production from Newmont’s 38.5% of Nevada Gold Mines totaled 290,000 ounces, up from 284,000 ounces in the quarter ending June 30, 2021, according to the July 25 announcement. Newmont is a joint venture partner in NGM with Barrick Gold Corp., which holds 61.5%.
Newmont also produced 330,000 attributable gold ounces from co-products in the quarter, up from 302,000 ounces in the 2021 quarter.
Newmont’s adjusted earnings at 46 cents per share fell below the Bloomberg consensus estimate of 64 cents per share, while revenues were at $3.1 billion, roughly the same as in the 2021 quarter and in line with estimates, according to Seeking Alpha. Zacks Consensus Estimate was 60 cents per share.
Challenges outlined in the earnings conference call ranged from cost pressures due to inflation to labor shortages and higher labor costs, high diesel prices, shortages and rising prices in the supply chain and a slipping gold price.
Palmer said the labor difficulties arise from high demand for contractors and experts rather than the actual Newmont workforce, which is “relatively stable,” with a manageable turnover.
On the bright side, the labor shortage at Newmont’s Boddington Mine in Australia is lessened by the autonomous fleet of haul trucks that don’t require drivers in the trucks, both Palmer and Executive Vice President and Chief Operating Officer Rob Atkinson said.
Diesel prices are up $50 per ounce of gold, Palmer said, while commodity and materials costs are up, with cyanide and explosives costing 20 to 30% more. Steel prices also are up, and he said cost pressures will continue into 2023.
Palmer said, however, that Newmont benefits from strong partnerships with suppliers and from long-term contracts that ease the threat of disruptions. While costs may be up 15% to 30% for commodities, Newmont may be paying as low as 3% to 5% more.
Looking at the gold price, Executive Vice President and Chief Financial Officer Nancy Buese said in the call that prices came down in June, affecting the earnings.
The company’s average realized price for gold in the quarter was $1,836 per ounce, compared with $1,823 per ounce in the 2021 quarter, but the low London PM fix price in June was $1,817.
Newmont also declared a dividend of 55 cents for the second quarter, based on a gold price of $1,800, which Palmer said is “a key aspect” of how the board determines the dividend. “It drives our dividend framework.”
Looking at other metals, Newmont reported that the average realized price for copper was $2.99 per pound, down 32% from $4.37 per pound in the second quarter of last year, and the silver price was $17.42, down 24% from $23 in the 2021 quarter.
The challenges also led to Newmont revising the production outlook for this year to 6 million ounces of attributable gold production, down from 6.2 million ounces. The 1.3 million gold equivalent ounces from copper, silver, lead and zinc is the same as the earlier outlook, however.
The lower gold production outlook is because of operational challenges at the Ahafo Mine in Ghana, a transition to leach-only at Cripple Creek & Victor Mine in Colorado, and the competitive labor market, primarily in Canada and Australia, according to the company.
Production at the Cripple Creek & Victor Mine is expected to be down 40,000 ounces this year because of the decision to convert the mine to heap leach only, ending the transportation of ore from Cripple Creek to Nevada for NGM to process. The mine’s production had been forecast at 210,000 ounces for the year.
Palmer said the mill will be on care and maintenance and the focus on open pit mining and heap leaching should lead to a “very long mine life” for Cripple Creek.
All-in sustainable costs companywide are up from to $1,150 per ounce from $1,050 per ounce in the new outlook.
SSR Mining Inc.’s adjusted net income for the second quarter was $66.8 million, or 30 cents per share, and the company reported second-quarter production of 159,262 gold equivalent ounces but predicted the highest production will be in the fourth quarter, driven by stronger production at Marigold in Nevada.
The adjusted profit is down from $107.32 million, or 47 cents per share, in the second quarter of 2021, and the Denver-based company posted net income attributable to equity holders of $58.5 million, or 27 cents per share, in the second quarter, down from $74.72 million, or 33 cents per share, in the 2021 quarter.
“The second quarter of 2022 demonstrated the continued resilience of our globally diversified business in the face of inflationary pressures, as our consolidated production and cost metrics tracked well against our year-to-date targets,” Rod Antal, president and chief executive officer, said in the announcement.
He said production of 333,021 gold equivalent ounces in the first six months of this year from the company’s four operating assets at production costs of $918 per ounce and all-in sustaining costs of $1,177 per ounce “showcased solid margins,” but guidance for the year is being adjusted.
“We are, however, continuing to face increased cost pressures, especially in fuel, electricity and reagents across that business that have outpaced our various cost mitigation efforts this year,” Antal said.
In the earnings webcast, he also said that labor costs are impacting the company, as well.
Antal said SSR Mining’s guidance for equivalent gold ounces will remain the same but likely at the lower end of the range, but cost guidance is now higher to “reflect these macroeconomic pressures and the temporary suspension of the Copler Mine.”
The company’s production guidance is for between 700,000 and 780,000 gold equivalent ounces in 2022 from Marigold at Valmy, Copler in Turkey, Seabee in Canada and Puna in Argentina. The all-in sustaining costs are now estimated at $1,230 to $1,290 per ounce for the company this year, compared with the earlier projections of $1,120 to $1,180 per gold equivalent ounce.
Antal said in the webcast that SSR has a “clear opportunity to deliver 700,000 plus ounces through the end of the decade.”
SSR’s earnings report shows that the average realized gold price was $1,862 per ounce in the second quarter, compared with $1,820 per ounce in the second quarter of 2021.
Revenue totaled $319.58 million, down from $376.95 million in the second quarter of last year, and The Associated Press reported that the adjusted earnings per share of 30 cents per share beat Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was 22 cents per share.
Antal said SSR Mining has completed the improvement initiatives at the heap leach pad at Copler required by the Turkey’s Ministry of Environment, and “after inspection and verification by the regulators, we will move towards obtaining the approvals to restart operations.”
The company earlier reported that on June 21 there was a minor cyanide leak, but there was no discharge from site.
Marigold Mine produced 45,769 ounces of gold in the second quarter, down from 57,892 ounces in the 2021 quarter, and the company reported production this year is weighted toward the second half of the year, mainly the fourth quarter because of higher ore grades stacked on the leach pads in the second and third quarters.
Slower leaching took place in the first half of the year at Marigold because of finer ore from the north pits delaying some gold recovery, the company reported.
Six rigs are exploring at Marigold at Trenton Canyon, Buffalo Valley and New Millennium, Executive Vice President and Chief Operating Officer Stewart Beckman said in the earnings webcast, also reporting that the U.S. Bureau of Land Management’s environmental assessment of an expanded Valmy Pit is expected in 2024.
SSR Mining’s board declared a dividend of 7 cents per share on Aug. 2, and Antal said the company will continue its share buyback program “as an accretive mechanism to return capital to our shareholders.” As of June 30, the company had purchased 797,842 outstanding common shares at an average price of $18.38 per share.
The company also announced the restructuring of the chief operating role that creates two executive vice president positions, one focused on growth and innovation and the other on operations and sustainability.
John Ebbett, currently vice president of project development, will become executive vice president for growth and innovation, and SSR Mining is recruiting for the other position. Beckman will be returning to Australia at the end of the year but will remain an internal resource until the end of 2023, according to the company.
Additionally in the second quarter, SSR completed the sale of the Pitarrilla project to Endeavour Silver for $35 million in cash, $35 million in Endeavour Silver shares, and a 1.25% net smelter royalty, and the company acquired all the shares of Taiga Gold Corp. to give it 100% interest in the Fisher property contiguous to the Seabee operations in Saskatchewan.  
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