Covid-19 Containment Measures Expected to Trigger
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Posted On: 11/07/2020 2:33:54 AM
Covid-19 Containment Measures Expected to Trigger Slump in Gold Supply
Most experts expect roughly a 1.7% decrease in the total output of gold worldwide this year. This is largely because of mines shutting down, mainly during the second quarter of 2020 because of coronavirus restrictions. A reduction in production levels from nearly all top global producers is also expected in 2020 because of the pandemic and the resulting lockdowns that affected several important markets such as South Africa.
Strangely enough, the price of gold is at an all-time high now and has been since August. The rate is $2,000 per ounce, thus supporting profit growth for several gold miners. This comes at a time when output is decreasing, and many speculate that the growth in demand may be because of widespread uncertainty about the future of economies. Some hypothesize that this may be because the general public fears a possible worldwide economic downturn.
After the outbreak, the two biggest gold producers — Barrick Gold and Newmont — decreased their guidance to 11 million ounces from 11.6 moz (million ounces). In the second quarter of this year, production from these two firms more than halved, dropping from 2.9 million ounces in 2019’s second quarter to 1.4 million ounces in 2020’s second quarter. The coronavirus outbreak also led to the temporary suspension of Newmont’s Musselwhite, Penasquito, Eleonore, Yanacoch and Cerro Negro mines as well as Barrick Gold’s Porgera and Veladero mines in the months of April and May.
Meanwhile, Polyus Gold’s guidance remains unchanged with Kinross and AngloGold Ashanti suspending their outlook for this year. The coronavirus restrictions that were imposed on AngloGold Ashanti’s operations in South Africa caused a 63,000-ounce decline in the output of 2020’s first half. The company’s overall decrease in the first half of 2020 was 85,000 ounces.
Other factors that have affected the gold output of leading firms this year are sale of assets and lower ore grades. In the case of Newcrest, output decreased because of the sale of the Gosowong mine, which is one of the biggest mines in Indonesia. The mine was sold in March to Indotan Halmahera of Jakarta.
On the other hand, Newmont sold its Kalgoorlie projects located in Western Australia at the start of this year and its Red Lake project in Canada a few months later in April. The primary reason for the sale was because the projects were contributing factors to its lower rate of production.
Josemaria Resources Inc. (TSX: JOSE) (OTC Pink: JOSMF) is an interesting mining company you need to watch. At the moment, this Vancouver-based company is focusing on developing its own copper and gold-extraction project.
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Most experts expect roughly a 1.7% decrease in the total output of gold worldwide this year. This is largely because of mines shutting down, mainly during the second quarter of 2020 because of coronavirus restrictions. A reduction in production levels from nearly all top global producers is also expected in 2020 because of the pandemic and the resulting lockdowns that affected several important markets such as South Africa.
Strangely enough, the price of gold is at an all-time high now and has been since August. The rate is $2,000 per ounce, thus supporting profit growth for several gold miners. This comes at a time when output is decreasing, and many speculate that the growth in demand may be because of widespread uncertainty about the future of economies. Some hypothesize that this may be because the general public fears a possible worldwide economic downturn.
After the outbreak, the two biggest gold producers — Barrick Gold and Newmont — decreased their guidance to 11 million ounces from 11.6 moz (million ounces). In the second quarter of this year, production from these two firms more than halved, dropping from 2.9 million ounces in 2019’s second quarter to 1.4 million ounces in 2020’s second quarter. The coronavirus outbreak also led to the temporary suspension of Newmont’s Musselwhite, Penasquito, Eleonore, Yanacoch and Cerro Negro mines as well as Barrick Gold’s Porgera and Veladero mines in the months of April and May.
Meanwhile, Polyus Gold’s guidance remains unchanged with Kinross and AngloGold Ashanti suspending their outlook for this year. The coronavirus restrictions that were imposed on AngloGold Ashanti’s operations in South Africa caused a 63,000-ounce decline in the output of 2020’s first half. The company’s overall decrease in the first half of 2020 was 85,000 ounces.
Other factors that have affected the gold output of leading firms this year are sale of assets and lower ore grades. In the case of Newcrest, output decreased because of the sale of the Gosowong mine, which is one of the biggest mines in Indonesia. The mine was sold in March to Indotan Halmahera of Jakarta.
On the other hand, Newmont sold its Kalgoorlie projects located in Western Australia at the start of this year and its Red Lake project in Canada a few months later in April. The primary reason for the sale was because the projects were contributing factors to its lower rate of production.
Josemaria Resources Inc. (TSX: JOSE) (OTC Pink: JOSMF) is an interesting mining company you need to watch. At the moment, this Vancouver-based company is focusing on developing its own copper and gold-extraction project.
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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