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Production drop of nearly 1M gold ounces by top miners in Q1

Kitco News

Senior gold miners listed on the NYSE gold production dropped a cummulative of 974,000 ounces in Q1 compared to production totals in Q4 2019.

In a study of the top gold miners listed on the NYSE, nine out of ten miners recorded production drops in Q1. (AngloGold Ashanti did not release a Q4 total for 2019. Instead, the Q4 total was averaged from the company's six-month total. The other exception was Kinross Gold, which released production in gold equivalent ounces.)

Cumulative fourth quarter production in 2019 for the largest gold miners listed on the NYSE was 6.834 million ounces. In Q1 of 2020, production dropped 15% to 5.859 million ounces.

Miners were affected by governments enforcing closures on mines around the world, such as Mexico, South Africa and the province of Quebec in Canada. COVID-19 wasn't the only reason for the fall off. Production was also affected by seasonal changes, modified mine plans and variability in operations.

The sole miner that recorded an uptick, Kirkland Lake Gold, was an unusual case. It added production due to summing production from its newly-acquired Detour Gold. It's operations in Australia were also largely unaffected by COVID-19 work restrictions.

Production numbers could be worse in Q2, said Wheaton Precious Metals' CEO, Randy Smallwood, who talked to Kitco last week.

“In terms of financial impact and impact on cash flows, Q2 is going to capture the bulk of it,” he said. “The suspensions that we’ve had all started in late March, early April."

Sibanye-Stillwater concurred.

"I think quite obvious what the impact on quarter two is. So South Africa went into a covert 19 lockdown in the last week in March. Um, the initial lockdown was for three weeks, and it was a total lockdown," said CEO Neal Fonenman who spoke to Kitco today.

Gold Production Q4 2019 vs Q1 2020

Q4-2019Q1-2020-1,818,166-1,427,166-267,908-482,844-211,166-851,666-594,197-578,166-288,744-196,060-1,467,166-1,238,166-319,030-399,532-144,166-704,166-555,493-525,166-226,242-162,521NewmontBarrick Gold Kirkland Lake Gold Agnico Eagle Mines Freeport-McMoRan AngloGold Ashanti*Kinross Gold** Gold Fields Sibanye-Stillwater Compania de Minas Buenaventura

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