Newmont Goldcorp’s President & CEO Tom Palmer addressed the industry at the 30th annual Denver Gold Forum with his vision for the future of the world’s leading gold miner.
“As the world’s leading gold company, Newmont remains focused on keeping our people safe, while growing our profit margins through operating, technical and financial discipline,” said incoming CEO Palmer ahead of the event. “We will also generate value for our shareholders by leveraging Newmont’s leading land position and exploration program in favourable jurisdictions to grow our reserves and resources.”
Palmer spoke of “exceeding targeted synergies” with regard to Newmont’s takeover of Goldcorp and the formation of Newmont Goldcorp earlier this year which leaves the company “on track to capture at least $110mnn per annum in G&A savings” well above the original target of $85mn. Meanwhile it will exceed the promised synergy commitment of $365mn per annum in G&A and exploration synergies, full potential improvements, and supply chain savings by 2021.
By year end 2019, Palmer notes the company will achieve a $200mn run-rate, representing 55% of its three-year commitment on value delivery. “In 2019, expect $50 million per annum in value from Peñasquito in Mexico alone, with an additional $200 million in improvement opportunities identified,” he added.
Palmer said that Newmont Goldcorp would continue to focus on portfolio optimisation with the process of the potential sale of Red Lake in Canada underway. Elsewhere the company has divested its interest in Guinea’s Nimba iron ore project and will continue to streamline its portfolio to focus on high quality assets in favourable jurisdictions.
“We have the deepest pipeline of world-class projects in the gold sector, giving us significant project sequencing flexibility,” said Palmer. “As part of our integration and annual planning work, we will continue to apply our disciplined and rigorous approach to optimise these projects and advance them through our investment system.”
Among these projects, the Ahafo Mill Expansion in Ghana, Quecher Main in Peru and Borden in Canada are expected to achieve commercial production in the fourth quarter of this year. The company’s disciplined approach to project optimisation has delivered eight projects since 2015 with an average internal rate of return more than 30%.
Beyond gold production, Newmont Goldcorp’s portfolio generates approximately $1.5bn of revenue per annum from co-products like copper, silver, zinc and lead. “We remain well positioned to deliver a stable production profile with visibility into the next seven years through 2025,” pledged Palmer. “We are tracking within the range of our previously provided long-term guidance, which provides more transparency into future cash flows than anyone else in our industry.
A fourth-generation miner, Tom Palmer will succeed Gary Goldberg on October 1 to assume leadership of the company as President and Chief Executive Officer in its centenary year. Since May of 2016, when Palmer was appointed Executive Vice President and Chief Operating Officer - with more than 85% of the company’s workforce reporting to him - Newmont Goldcorp has generated more than $2bn in free cash flow and commissioned two new mines and six expansions on four continents, on or ahead of schedule and at or below budget. Palmer has also played a central role in leading the Newmont Goldcorp integration and the establishment of the joint venture with Barrick in Nevada.
Newmont Goldcorp has the strongest and most sustainable portfolio of operations, projects and exploration prospects in the gold sector. This includes the largest reserves and resources, with 90% of reserves located in the Americas and Australia. These assets allow the company to sequence profitable projects in its unmatched pipeline to sustain six to seven million ounces of steady gold production over a decades-long time horizon.