Is Newmont Set To Become The World’s Largest Gold Producer?
Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM) released their 4th quarter and full year 2017 results this month. Barrick has historically been the world’s largest gold producer (on the basis of production volume) however, there is a great probability for Newmont to surpass this position in the upcoming year. The latest results depict that Barrick had surpassed Newmont’s production volume in 2017 by a mere volume of ~50,000 ounces of gold. Barrick’s production volume is expected to decline further in the upcoming year, which would pave the way for Newmont to become the largest gold miner in the world.
Barrick’s production volumes have been declining as a result of its falling reserves. The company reported that its reserves for unmined gold dropped by 25% in 2017 to 64.5 million ounces. This was a resultant impact of the company selling off its mine stakes and changing its plan for a South American asset. Additionally, stringent exploration and development budgets in order to strengthen its cash flow and balance sheet position have hindered the process of establishment of newer mines for the company. With improving gold prices, the company plans to mitigate the impact of falling reserves by increasing its capital spend on project development by more than 60% in 2018.
Have more questions about Newmont Mining? See the links below.
- How Sensitive is Newmont’s Valuation To The Changes In The Price of Gold?
- Here’s How the U.S. Tax Reform is Impacting Newmont Mining
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