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Most Gold Miners Reported Declining Production in Q4

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Production decline

Goldcorp’s (GG) production for the fourth quarter came in at 630,000 ounces of gold, a YoY decline of 2.5%. A large part of the decline in production volumes is due to the multiyear waste stripping campaign at Penasquito.

The company is guiding for gold production of 2.2 million to 2.4 million ounces in 2019. This guidance is in line with its 2018 production of 2.3 million ounces.

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Barrick’s production to come in at the lower end

Barrick Gold (GOLD) produced 1.26 million ounces of gold in the fourth quarter, a fall of ~6.0% YoY. The company’s 2018 annual production was 4.53 million ounces, which is in line with its guidance range of 4.5 million–5.0 million ounces. However, the production fell 15% compared to 2017.

NEM and KGC: Production fell

Unlike the decline in production for GOLD and GG, Newmont Mining’s (NEM) production rose by 8% YoY to 1.44 million ounces during the fourth quarter. Higher grades and recovery at the Cripple Creek & Victor and Ahafo mines were mainly responsible for higher production. Its total production of 5.1 million ounces in 2018 was in line with its guidance of 4.9 million–5.4 million ounces.

Kinross Gold (KGC) produced 610,152 gold equivalent ounces in the fourth quarter, a decline of 6.5% YoY. Its full-year production also declined 8% YoY in 2018 to 2.45 million ounces. In-line with its guidance for 2018, the company expects to produce about 2.5 million ounces in 2019 as well.

The production of most of these miners (GDX) has fallen. Moreover, the production guidance of most of these miners implies a YoY fall. It is probably because of this reason that many miners have opted for mergers and acquisitions to increase their profitable production. In the next part, we’ll look at these miners’ medium-term to long-term production growth expectations.

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