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Which Gold Miners Could Grow Their Productions Going Forward?

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Long-term production growth, strong project pipelines

After making discretionary cuts on exploration and capex for many years, gold miners (GDX) (JNUG) have started to refocus on production growth.

Newmont Mining (NEM) has approved eight projects since mid-2014. In the second quarter, the company completed two projects in North America. It’s also still on track to reach commercial production at Subika Underground in the fourth quarter. The work at its Ahafo Mill Expansion is also ramping up and is expected to reach commercial production in the second half of 2019. Newmont is expecting its long-term production to remain stable between 4.6 million and 5.1 million ounces per year through 2022.

Goldcorp’s (GG) growth projects, along with its aggressive exploration program, should help it to grow its reserves by 20% through 2021. The company has identified Century, NuevaUnión, and Norte Abierto as the three projects that will drive its organic growth beyond 2021.

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Declining long-term production profile

Barrick Gold (ABX) is expecting four feasibility-level projects to contribute more than 1 million ounces to its annual production. They’re expected to begin contributing to production in 2021. Barrick mentioned on its second-quarter earnings call that its growth projects in Nevada and the Dominican Republic are progressing well. However, until these projects come into commercial production, Barrick’s production growth profile is in a state of decline.

Growth project under threat

Kinross Gold’s (KGC) Bald Mountain Vantage Complex is proceeding on schedule. The construction of Kinross Gold’s Tasiast Phase One expansion is complete. The company stated that throughput is continuing to ramp up and has peaked at 12,000 tons per day. It has, however, temporarily halted the Tasiast Expansion Phase Two, as it’s currently in negotiations with the Mauritanian government.

KGC is also exploring alternative approaches to expanding the Tasiast mine to maintain optionality. The second phase was expected to boost its daily processing to 30,000 tons per day. While a favorable decision on the progress of this project would be beneficial to the company’s costs and production, a less-than-desirable decision could seriously affect its production growth profile going forward.

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