What Are the Production Drivers for These Gold Miners?


Jun. 14 2019, Updated 4:28 p.m. ET

Production increase

Agnico Eagle Mines’ (AEM) gold (GLD) production improved by 2% YoY (year-over-year) to 398,217 ounces in the first quarter. The company’s Meliadine mine reached commercial production in May 2019.

With the startup of Meliadine and Amaruq in the third quarter, the company is expecting higher earnings and cash flows in the second half of the year. Agnico expects to produce 1.75 million ounces of gold in 2019, which would be a record for the company.

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Barrick’s production to rise after the merger

Barrick Gold’s (GOLD) gold production increased by ~30% YoY and 8% sequentially to 1.36 million ounces in the first quarter. This increase in production was expected due to Barrick’s merger with Randgold Resources, which came into effect on January 1. In 2019, the combined company is expecting to produce 5.1 million–5.6 million ounces of gold. This production is 18% higher YoY at the midpoint due to its merger with Randgold. The company expects its production to be slightly higher in the second half of this year than in the first half.


In the first quarter, Newmont Goldcorp (NEM) produced 1.23 million ounces of gold, an increase of 1.7% YoY and a decline of 14.6% sequentially. Newmont maintained its guidance of 5.2 million ounces of gold production in 2019 due to the full year of production of the newly completed Subika Underground. It’s expecting production of 4.9 million ounces in 2020 and between 4.4 million and 4.9 million ounces in the long term.

Kinross Gold (KGC) produced 606,031 gold equivalent ounces in the first quarter, a decline of 7.0% YoY. Three of its largest operations produced over 60% of its first-quarter volumes, which is significant, as the cost per unit of these operations is also low.

These operations have kept Kinross on track to produce 2.5 million ounces plus or minus 5% in 2019. This production would be the same as the company achieved in 2018.

Of the above-mentioned miners (GDX), only AEM is organically increasing production. NEM and GOLD resorted to mergers to improve their shareholder value, while KGC’s production growth could be in a state of decline in the medium to long term.


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