While ounces produced may be down in 2020, the margins for gold miners may be better.
A number of precious metal producers are reducing production due to government restrictions in response to COVID-19 concerns. Companies with operations in South Africa, Quebec and parts of Ontario have been told to stop operating.
One-third of NYSE-listed senior gold miners have withdrawn 2020 production guidance, according to data compiled by Kitco. (Sibanye-Stillwater, which is putting its South African mines on care and maintenance for the next 21 days, just said '...production for 2020 may differ from previous guidance.') And as more miners reckon with the impact of COVID-19, the number should rise.
Joe Mazumdar, editor and analyst at Exploration Insights, said this setback might not hurt as much as imagined. Gold seniors are cashed up due to the precious metal performing well in 2019, so the miners are in better shape to weather the downturn. Oil prices have also fallen steeply, a significant cost for miners.
'[The seniors] may produce less ounces, but I think the potential for them to generate more margin on each ounce is pretty good,' said Mazumdar.
Here's our compiled list as of March 25 on how COVID-19 has affected NYSE-listed senior gold producers. Any data points or information missing? Let us know in the comments below. Market capitalization figures as of March 25, 2020.
1. Newmont (NYSE:NEM) $38.4B market cap - On March 22, the world's largest gold-mining company is putting four mines on “care and maintenance” and withdrawing its 2020 production guidance as a result of the COVID-19 outbreakaround the world, the company announced Monday. Guidance is withdrawn. Mines representing approximately 80 percent of the company's production outlook for 2020 continue operating in line with production targets for the year.
2. Barrick Gold (NYSE:GOLD) $33.98B - Outside of the usual announcements regarding COVID-19 precautions, Barrick has filed limited news about impacts on operations. There has been no announcements regarding outlook in public filings. On March 24, the company said it is limiting work at Ontario-based Hemlo Mine, but operations continue since Hemlo is an 'essential business to the community.'
3. Kirkland Lake Gold (NYSE:KL) $13.36B - On March 22 the company terminated its share purchasing program. Kirkland's newly-acquired Detour Lake Mine 'will transition to reduced operations.' The company said the impact on production could not be estimated at this time.
4. Freeport-McMoran (NYSE:FCX) $10.52B - Freeport, one of the world's largest publicly traded copper companies and also a major gold producer due to by-product output at its mine in Indonesia, said on March 23, it is suspending its dividend in response to the economic uncertainty brought about by the COVID-19 pandemic. The company also said it is revising its mining plan due to low prices for base metals. Copper and molybdenum production could be reduced.
5. Agnico Eagle Mines (NYSE:AEM) $9.95B - Bowing to provincial authorities, Agnico Eagle Mines said on March 24 that it is ramping down operations in the Abitibi region of Quebec, which include the LaRonde Complex, the Goldex mine and the Canadian Malartic mine. The three Abitibi operations accounted for 876,000 ounces of payable gold production in 2019. Agnico Eagle's total production in 2019 was 1.78 million ounces of payable gold production. The company has also withdrawn guidance.
6. AngloGold Ashanti (NYSE:AU) $8.26B - AngloGold Ashanti will temporarily suspend production from its South African operations for three weeks starting March 26. South Africa's State President Cyril Ramaphosa that the country would go into a nationwide lockdown for 21 days. The company also suspended production at its Cerro Vanguardia mine in Argentina. In 2018 South African gold production was 487,000 ounces, and at Cerro Vanguardia, the company produced 282,000 ounces.
7. Kinross Gold (NYSE:KGC) $5.84B - $5.84B - No real news outside of general precautions. On March 25, the company said operations continue at Kinross's Tasiast mine site in Mauritania.
8. Gold Fields (NYSE:GFI) $5.19B - Per President Cyril Ramaphosa announcement, Gold Fields' South Deep mine in South Africa will be safely put on care and maintenance on March 27 for 21 days. The company's Cerro Corona in Peru in on a 15-day curfew, but continues to operate.
9. Sibanye-Stillwater (NYSE:SBSW) $3.96B - On March 25, Sibanye's South African gold and PGM operations were placed under temporary care and maintenance to comply with the nationwide lockdown.
10. Yamana Gold (NYSE:AUY) $3.12B - On March 25, Yamana Gold withdrew production guidance for 2020 as some operations are curtailed as part of the global effort to combat the COVID-19 outbreak, the company said late Tuesday. Operations at the Canadian Malartic, a 50-50 joint venture with Agnico Eagle Mines Ltd., are being ramped down due to an order by Quebec officials to restrict non-essential business until April 13. Yamana described this gold mine as the largest in Canada.
11. Compania de Minas Buenaventura (NYSE:BVN) $2.24B - The company's Peru operations are under country-wide restrictions. As of March 17, the company said there had been no material impact to production or shipment of concentrate from any of the company's operations to date as a result of COVID-19. Additionally, there has been no significant disruption to the supply chain of the company's operations.
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