Could Newmont Mining Overtake Barrick Gold in Production?

Barrick Gold is still ahead in production

As of the last report, Barrick Gold (ABX) is still ahead of Newmont Mining (NEM) with respect to annual production. Barrick Gold produced 5.32 million ounces of gold in 2017 while Newmont Mining produced 5.30 million ounces.

However, Barrick Gold may not be able to sustain this lead for long. It has guided for production of 4.5 million–5.0 million ounces of gold in 2018. This guidance implies a decline of ~11.0% compared to the actual production in 2017, which was measured at the midpoint. Newmont Mining is guiding for production of 4.9 million–5.4 million ounces of gold in 2018 and 2019.

Could Newmont Mining Overtake Barrick Gold in Production?

Newmont Mining could overtake Barrick Gold

Barrick Gold reduced its guidance for 2018 and also cut its long-term production guidance. The miner is currently guiding for 4.2 million–4.6 million ounces of production for 2019, compared to its previous guidance of 4.6 million–5.1 million ounces.

Newmont Mining expects its longer-term production to remain stable, reaching 4.6 million–5.1 million ounces per year through 2022. This outlook excludes development projects that have yet to be approved, which could mean further upside. It appears likely that Newmont could overtake Barrick as far as annual production and production growth are concerned.

Growth opportunities

Barrick Gold has outlined its organic investments that could drive long-term value for the company. It expects four feasibility-level projects to contribute more than 1.0 million ounces of annual production. The initial ounces from these projects are expected by 2021. Newmont Mining, on the other hand, has a strong project pipeline underpinning its production growth in the medium term and long term.

Agnico Eagle Mines (AEM) and Goldcorp (GG) have steadily increased their production profiles due to their strong project pipelines. The upside to Kinross Gold’s (KGC) production growth lies in the Tasiast Phase-I and Tasiast Phase-II expansion.