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Major Drilling
The worldwide leader in specialized drilling
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Major Drilling is one of the world’s largest drilling services companies primarily serving the mining industry, and maintains field operations and offices in Canada, the United States, Mexico, South America, Asia and Australia.
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of world-class assets across top tier jurisdictions underpins the financial flexibility to take care of our employees, communities and shareholders. I am proud of the way our employees have responded to these challenging times.”
The Peñasquito mine in Mexico is a good example of what he means. Newmont established infrastructure very early in the pandemic to keep employees and the surrounding communities safe, providing thousands of cleaning kits for health clinics and families, tens of thousands of reusable masks and thousands of books for distance learning.
Across the 18 testing sites the company established throughout Mexico, Newmont’s teams performed over 50,000 Covid-19 tests, testing people when they arrive at the site and also when they leave, so they can return to their families and communities safely.
In Ghana, elementary schools closed in March 2020, disrupting the education of many children. For some, due to limited access to digital devices and the internet, virtual learning has not been an option.
As part of Newmont’s Global Community Support Fund, and through the Gold-4-Gold Reading Program (a literacy initiative launched in 2019), Newmont Ghana rolled out a reading program in partnership with United Way Ghana and the Ghana Library Authority, designed to minimize the educational impacts of Covid-19 on children in the Ayawaso District of the capital city, Accra.
Another way of supporting communities is by local procurement. Plans have long been in place to optimize procurement and employment opportunities for key stakeholder groups by promoting local employability and skills development, diversity of the workforce, small business development for locals and sustainable business opportunities.
Developing and maintaining good relationships with suppliers is essential to Newmont’s overall success, so the company follows a sourcing strategy that utilizes only the highest performing suppliers for any type of good or service acquired. Its Supplier Code of Conduct sets out the minimum standards of conduct expected from all suppliers wishing to do business with, or on behalf of, Newmont, one of which is to embrace the company’s local procurement and employment philosophy, too.
Outlook
Newmont announced its 2021 outlook in February, with attributable gold production guidance of 6.5 million ounces and AISC (all-in sustainable costs) of $970 per ounce. Attributable gold production is expected to be between 6.2 and 6.7 million ounces per year in 2022 and 2023, increasing to between 6.5 to 7.0 million ounces in 2024 and 2025, with improving costs.
Newmont’s outlook reflects increasing gold production and ongoing investment in its operating assets and most promising growth prospects. The company has included Ahafo North and Yanacocha Sulfides in its outlook for the first time as the development projects are expected to reach execution stage in 2021.
“Newmont’s outlook remains strong and stable as we apply the rigour and discipline of our proven operating model across our world-class portfolio,” said Tom Palmer. “Our five-year outlook reflects improving production and costs as we continue to deliver value from superior operational and project execution. Our strong financial position allows us to continue investing in profitable, organic growth while simultaneously returning cash to shareholders through our industry leading dividend framework.”
The outlook for Africa shows production improving in 2021 with Subika Underground delivering higher tonnes at Ahafo, while Akyem benefits from higher grade. CAS (cost of sales) per ounce remains steady with higher grade at Akyem, offset by slightly higher costs at Ahafo due to stockpile processing and stripping from the Subika open pit.
Subika Underground should continue
first among equals
to deliver higher tonnes through 20222023 while Subika open pit reaches higher grade, partially offset by mine sequencing at Akyem. AISC increases in 2022 with sustaining capital spend for the tailings storage facility at Ahafo. Ahafo North then begins to ramp up in 2023, contributing to the higher production and improving unit costs.
In North America, Newmont foresees increased production in 2021 after a full year of operations at Peñasquito in Mexico, and Éléonore and Musselwhite (Canada). Peñasquito is expected to reach slightly higher grade and sustain ‘Full Potential’ improvements in the mill. Porcupine (Canada) will benefit from higher underground and open pit tonnes mined, partially offset by lower leach pad production at Cripple Creek and Victor (Colorado, US). Unit costs are also expected to improve with higher production from a full year of operations at Peñasquito, Éléonore and Musselwhite.
Through 2022 and 2023, Éléonore, Musselwhite and CC&V will deliver steady production while Porcupine benefits from higher grades in the Borden underground and the Hollinger open pit mines (in 2022) before Hollinger begins to ramp down in 2023. Peñasquito is, by then, mining lower grade, harder ore from the Chile Colorado pit while stripping the next phases of the Peñasco pit from 2022 to 2024.
Unit costs impacted by mine sequencing at Peñasquito, Éléonore, CC&V and Porcupine will be partially offset by improved productivity and efficiencies at Musselwhite, with the completion of the new conveyor system and lower mine material handling system.
In South America, a full year of production in 2021 from Cerro Negro is likely to be partially offset by Merian (Surinam) transitioning to harder rock and Yanacocha transitioning to a primarily leach operation while developing the first phase of the sulfide resources. Unit costs remain steady with higher production and improved productivity at Cerro Negro, offset by lower production at Yanacocha.
Production is forecast to improve through 2022-2023 with higher ore tonnes mined from Full Potential productivity improvements and mining from five to six ore sources at Cerro Negro. Yanacocha and Merian are expected to be impacted by slightly lower production due to mine sequencing.
In Australia, production will benefit in 2021 from Full Potential improvements at Boddington to sustain mill throughput at greater than 40 million tonnes per annum, while the site also benefits from higher grade in the South Pit. Tanami continues to deliver solid performance with 500,000 ounces of production while advancing the Tanami Expansion 2 project. AISC includes sustaining capital spend at Boddington to advance Autonomous Haulage, which is expected to reach commercial production in 2021.
Production at Boddington benefits from higher grade and improved efficiency from autonomous haulage beginning in 2022 before transitioning to stripping the next layback in 2023. Tanami will partially offset Boddington’s lower production in 2023 as Tanami Expansion 2 begins to ramp up.
Unit costs improve with higher grade and efficiency at Boddington and improved underground efficiencies at Tanami as the second expansion comes online.
Newmont has been careful to point out that its 2021 and longerterm outlook assumes operations continue without major Covid-related interruptions. The company continues to maintain wide-ranging protective measures for its workforce and neighbouring communities, including screening, physical distancing, deep cleaning and avoiding exposure for at-risk individuals. If continuing operations pose an increased risk to the workforce or host communities, Newmont says it will reduce operational activities up to, and including, care and maintenance and management of critical environmental systems. www.newmont.com
bhp
performance & development
BHP has emerged from a difficult year with a strong safety performance, operations enhanced by automation and reduced carbon emissions, and development projects on track using local suppliers
In his introduction to the operational review for the nine months ended 31 March 2021, BHP Chief Executive Officer Mike Henry highlighted a strong safety and operational performance, with record year-to-date production at Western Australia Iron Ore, the Goonyella Riverside metallurgical coal mine in Queensland and concentrator throughput at Escondida in Chile. Major projects are being ramped up, he said, bringing on new supply in copper and iron ore, with the Spence Growth Option producing copper in Chile and Samarco in Brazil recommencing iron ore pellet production at one concentrator in December 2020. The South Flank iron ore project in Australia is on track to begin production in the middle of the year. One of BHP’s other growth projects, the Jansen potash project in Saskatchewan, Canada, remains on track for a final investment decision in mid-2021.
performance & development
IRON ORE
Despite restrictions associated with the Covid-19 pandemic, Western Australia Iron Ore (WAIO) achieved record production in FY2020 and again in the nine months to 31 March 2021. WAIO is an integrated system of four processing hubs and five mines connected by more than 1,000 kilometres of rail infrastructure and port facilities in the Pilbara region of northern Western Australia. The reserve base is relatively concentrated, allowing development to be planned around integrated mining hubs connected to the mines and satellite orebodies by conveyors or spur lines. This approach enables the value of installed infrastructure to be maximised by using the same processing plant and rail infrastructure for a number of orebodies. WAIO consists of four main joint ventures: Mt Newman, Yandi, Mt Goldsworthy and Jimblebar. BHP’s interest in each of the joint ventures is 85 per cent, with Mitsui and ITOCHU owning the remaining 15 per cent. The joint ventures are unincorporated, except Jimblebar. At each processing hub – Newman, Yandi, Mining Area C and Jimblebar – the ore is crushed, beneficiated (where necessary) and blended to create high-grade haematite lump and fines products which are then transported along the Port Hedland–Newman Rail Line to the Finucane Island and Nelson Point port facilities at Port Hedland. WAIO continues to focus on operating safely, implementing a series of preventive measures designed to minimise the spread of Covid-19. To meet border controls introduced by the Western Australian Government, more than 900 employees and contractors in business-critical roles were temporarily relocated to Western Australia, including train drivers and train load out operators. Construction began in July 2018 on the South Flank iron ore project in the Pilbara region. When operational, South Flank will be one of the largest iron ore processing hubs in the world. The project will include a crushing and screening plant, an overland conveyor system and rail-loading facilities. Commissioning activities for South Flank are expected to commence in the June 2021 quarter and the mine is expected to produce 80 million tonnes per annum (Mtpa), replacing volumes from Yandi as it reaches the end of its economic life in the early-to-mid 2020s. The project is expected to create 2,500 construction jobs, more than 600 operational roles and generate
