{"id":1150130,"date":"2019-11-15T17:13:14","date_gmt":"2019-11-15T23:13:14","guid":{"rendered":"https:\/\/www.mining.com\/?p=1007008"},"modified":"2019-11-15T17:13:14","modified_gmt":"2019-11-15T23:13:14","slug":"gold-production-and-capital-raising-up-operating-income-down-q2-2019","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1150130","title":{"rendered":"Gold: Production and capital raising up, operating income down \u2013 Q2 2019"},"content":{"rendered":"<p>In the second quarter of 2019, the global gold market continued to<br \/>\nrecover from the two-year lowest average price point of $1,213\/ozt recorded in<br \/>\nQ3 2018, rebounding to $1,310\/ozt in Q2 2019, the third consecutive quarter of<br \/>\ngrowth.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>MINING.COM analysed the effect of the gold price on the gold mining industry using data from sister company <em>Mining Intelligence\u2019s <\/em>proprietary&nbsp;<a href=\"https:\/\/www.miningintelligence.com\/\">Data Application<\/a>. The data we used represents companies reporting quarterly production and listed on the following stock exchanges: TSX (+TSX-V), ASX, LSE (+LSE-AIM), NYSE, and JSE.<\/p>\n<p>We looked at four metrics: quarterly gold production, all-in sustaining costs, operating income and capital raisings. The data indicates the following: Reported global gold production for Q2 2019 was ~15.4 Mozt, or up about 3% compared to Q1 2019 and down ~1% compared to Q2 2018.<\/p>\n<p>Global average all-in sustaining costs rose by 7%, from $1,000\/ozt in Q1<br \/>\n2019 to $1,068 in Q2 2019. Overall, gold producers have not managed to keep<br \/>\ncosts under control. Major gold producers\u2019 global aggregated quarterly<br \/>\noperating income did not follow rising gold price and shrank by 21%.<\/p>\n<p>Capital raisings completed by gold producers, developers, and explorers were up by 195% from Q1 2019 to Q2 2019 indicating return of investors\u2019 confidence in the gold mining industry.<\/p>\n<h2><strong>Reported global gold production<\/strong><\/h2>\n<p>For the Q2 ending June 30, 2019, global reported gold production<br \/>\ntotalled ~15.4 Mozt, or up ~3% compared to the previous quarter and down ~1%<br \/>\ncompared to Q2 2018 (Figure 1). Production increased in all major regions<br \/>\nexcept North America and Asia. North America was the largest gold producer (3.8<br \/>\nMozt), followed by Africa (3.5 Mozt), and Australia &amp; Oceania (3 Mozt).<\/p>\n<p>The three regions that contributed most to the 3% quarter-on-quarter improvement<br \/>\nin global gold output were Russia &amp; CIS (+303 kozt, or up 17%), Africa (+275<br \/>\nkozt, or up 9%), and South America (+123 kozt, or up 6% from Q1 2019).<\/p>\n<p>Russia was in the spotlight in Q2 2019 as reported quarterly gold<br \/>\nproduction surged by 18% in this region, from 1,264 kozt in Q1 2019 to 1,492<br \/>\nkozt in Q2 2019. Seasonal alluvial gold mining and production increase at new<br \/>\nand expanding operations have contributed most to the overall success of local<br \/>\ngold industry.<\/p>\n<p>After a 10% decline in Q1 2019, gold output in Africa was up 9% in Q2<br \/>\n2019, thanks to a significant production increase in South Africa (+18%) and<br \/>\nother countries of the continent. Ghana, Africa\u2019s biggest gold producer, increased<br \/>\ngold output from 700 kozt in Q1 to 743 kozt in Q2 2019, but runner up South<br \/>\nAfrica is closing the gap. <\/p>\n<p>Production in Asia took yet another nosedive \u2014 dropping 42% due to significant decrease in gold output at Indonesia\u2019s Grasberg mine as this legendary mine is still in transition from open-pit to underground operations.<\/p>\n<figure class=\"wp-block-image is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-1.jpg\" alt=\"\" class=\"wp-image-1006998\" width=\"600\" height=\"371\"\/><figcaption>Global reported quarterly gold production, regional level, Q1 2019 vs. previous quarters, kozt. <\/figcaption><\/figure>\n<\/p>\n<p style=\"text-align:left\">Seven out of the top 10 biggest gold mines reported a production increase with only three of them recorded a decline (Table 1).<\/p>\n<p>Despite 7% drop in output, Barrick\u2019s Goldstrike production center in Nevada, USA, retained the world\u2019s lead gold operation status (Muruntau mine is excluded due to lack of data), well ahead of its competitors.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Datawrap-chart-1.jpg\" alt=\"\" class=\"wp-image-1007002\" width=\"464\" height=\"473\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Datawrap-chart-1.jpg 618w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Datawrap-chart-1-294x300.jpg 294w\" sizes=\"(max-width: 464px) 100vw, 464px\" \/><\/figure>\n<\/div>\n<p>Second and third in this ranking are Polyus Gold\u2019s gigantic Olimpiada mine in Russia (351 kozt) and Newcrest\u2019s Lihir mine in Papua New Guinea (261 kozt). Former world\u2019s biggest Freeport\u2019s Grasberg gold mine (Indonesia) and Yamana \/ Agnico Eagle jointly-owned Canadian Malartic mine (Canada) dropped out of the top 10 list while Kinross\u2019 Paracatu mine (Brazil) and Newmont Goldcorp\u2019s Boddington mine (Australia) entered the ranking landing on the seventh and ninth positions, respectively. <\/p>\n<h2><strong>Reported&nbsp;global average quarterly all-in sustaining costs<\/strong><\/h2>\n<p>Global average all-in sustaining costs (AISC)&nbsp;rose by 7%, from $1,000\/ozt in Q1 2019 to $1,068 in Q2 2019 (Figure 2). This indicates that the trend on keeping costs under control observed over the previous four quarters, has reversed. Despite this, in Q2 2019, seven out of the top 10 lowest cost mines further decreased their AISC compared to Q1 2019 (Figure2).<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-2.jpg\" alt=\"\" class=\"wp-image-1006999\" width=\"529\" height=\"359\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-2.jpg 705w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-2-300x203.jpg 300w\" sizes=\"(max-width: 529px) 100vw, 529px\" \/><\/figure>\n<\/div>\n<p>With $318\/ozt recorded in Q2 2019, Kirkland Lake\u2019s Fosterville mine in<br \/>\nAustralia was the lowest cost gold operation for the third consecutive quarter<br \/>\nmeasured by AISC. Fosterville\u2019s ore grade was 40 grams of gold per tonne of<br \/>\nmilled ore, making this the world\u2019s highest-grade major gold mine in Q2 2019.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-datawrap-2-1.jpg\" alt=\"\" class=\"wp-image-1007004\" width=\"467\" height=\"494\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-datawrap-2-1.jpg 622w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-datawrap-2-1-284x300.jpg 284w\" sizes=\"(max-width: 467px) 100vw, 467px\" \/><\/figure>\n<\/div>\n<p>Fosterville was followed by Newmont Goldcorp\u2019s Long Canyon mine ($403\/ozt)<br \/>\nin the United States, and Eldorado Gold\u2019s Kisladag mine ($471\/ozt) in Turkey.<br \/>\nKisladag (Turkey), Tomingley (Australia), Blagodatnoye (Russia), Ity (Ivory<br \/>\nCoast) and Fekola (Mali) mines entered the top 10 lowest cost gold mines<br \/>\nranking in Q2 2019, while Mt Carlton (Australia), Kainantu (Papua New Guinea),<br \/>\nPueblo Viejo (Dominican Republic), Natalka (Russia) and Merian (Suriname) mines<br \/>\nhave left this competition, at least for the time being.<\/p>\n<h2><strong>Reported operating income<\/strong><\/h2>\n<p>Major gold producers\u2019 global aggregated quarterly operating income did not follow rising gold price and dwindled by 21%, from&nbsp;$2,150 million in Q1 2019 to $1,700 in Q2 2019 (Figure 3). Overall, companies have not managed to keep costs under control and, despite improved gold market, aggregated financial performance of gold mining industry has deteriorated.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"alignleft is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-3.jpg\" alt=\"\" class=\"wp-image-1007000\" width=\"600\" height=\"389\"\/><figcaption>The average gold price charted against gold companies&#8217; aggregated operating income. <br \/><\/figcaption><\/figure>\n<\/div>\n<h2><strong>Completed capital raisings<\/strong> <\/h2>\n<p>The strength of equity markets is a barometer of investor confidence. The amount of capital raised through equity placement directly reflects the sentiment in the mining industry. This indicator shows that in Q2 2019, investors\u2019 confidence in gold mining industry returned, with gold producers, developers, and explorers raising 195% more capital at major exchanges compared to Q1 2019 (Figure 4). <\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-4.jpg\" alt=\"\" class=\"wp-image-1007001\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-4.jpg 855w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-4-300x172.jpg 300w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/11\/Vlad-4-768x439.jpg 768w\" sizes=\"(max-width: 855px) 100vw, 855px\" \/><figcaption>The average gold price charted against gold companies&#8217; completed capital raisings <br \/><\/figcaption><\/figure>\n<p><em>Note: quarterly gold production reported by publicly-traded companies<br \/>\naccounts for about 65-70% of total global gold production and can be considered<br \/>\nan indicator of the overall state of the global gold mining industry.<\/em><\/p>\n<p><em>Mining Intelligence focused on primary gold operations\u2019 AISC, i.e. mines<br \/>\nwhere gold contributed to 90% and more of revenues from operating activities<br \/>\ngenerated during the quarter. The ranking excludes tailings re-processing<br \/>\noperations, mines where the precious metal is produced as a by-product, and<br \/>\noperations where companies report gold-equivalent output.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>MINING.COM analysed the effect of the gold price on the gold mining industry using data from sister company Mining Intelligence&rsquo;s proprietary Data Application.<\/p>\n","protected":false},"author":47,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,369],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1150130"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1150130"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1150130\/revisions"}],"predecessor-version":[{"id":1150131,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1150130\/revisions\/1150131"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1150130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1150130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1150130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}