Mining companies report Q3 results

Barrick Gold Corp reported adjusted net earnings of $726 million, or 41 cents per share, for the third quarter, a big jump from the 2019 quarter, and President and Chief Executive Officer Mark Bristow expressed enthusiasm for exploration prospects in Nevada.

The adjusted net earnings compared with $264 million in the third quarter of last year, while net earnings totaled $882 million, or 50 cents per share, down from $2.28 billion in the 2019 quarter, when Barrick took large accounting gains.

The average realized gold price was $1,926 per ounce in the quarter, up from $1,476 in the 2019 quarter, boosting free cash flow to $1.31 billion, up from $502 in the third quarter of 2019.

Additionally, Barrick announced a 9-cent dividend for the third quarter, and Graham Shuttleworth, executive vice president and chief financial officer, said this dividend represents the third increase in the quarterly dividend in the past year.

Looking at Nevada, where Barrick is 61.5% owner and operator of Nevada Gold Mines, the joint venture with Newmont Corp., which owns 38.5%, Bristow said in the earnings webinar that Nevada “has no shortages of opportunities, and the richly endowed Carlin Trend is our primary hunting ground.”

He said that on the Carlin Tend Leeville as multi-million-ounce potential and Goldrush, which is now connected to the Four Mile deposit, is “well on its way to being a 20 million-ounce asset that will deep the Cortez complex producing for decades to come.”

Construction of twin declines at Goldrush is ahead of schedule, and Barrick is completing a changeover from contractor development work to Cortez owner-operator workers for the underground work at Goldrush, Bristow said.

Meanwhile, Goldrush is on track to intersect gold ore in the first quarter of 2021, and Barrick is still expecting a record of decision from the U.S. Bureau of Land Management for Goldrush in the fourth quarter of next year to develop a mine.

Goldrush is part of NGM, but the Fourmile deposit is still 100% Barrick owned.

Bristow said the Turquoise Ridge Complex that includes Twin Creeks has potential, including exploration between Turquoise Ridge and the Twin Creeks properties. Before the joint venture, Newmont operated Twin Creeks.

“It’s amazing to me just how under-explored” the land between the two mines has been, he said.

At Carlin, NGM is drilling north of Leeville targeting the footwall of the Basin Bounding Fault that could be a feeder of mineralization at the Turf and Four Corners deposits. The Leeville area will be a top exploration focus in this fourth quarter, according to Barrick.

Drilling is also building a geological framework between Goldstrike and Leeville, a possibility made possible by the joint venture.

Companywide, gold production totaled slightly less than 1.16 million ounces, compared with a little more than 1.3 million ounces in the 2019 quarter. Total cash costs were $696 per ounce, compared with $710 last year, and all-in sustaining costs averaged $966 per ounce, compared with $986 per ounce in the third quarter of 2019.

“Our year-to-date gold production of 3.6 million ounces keeps Barrick on track to achieve our guidance of between 4.6 and 5.0 million ounces for the year,” Bristow said.

Production included 538,000 ounces for Barrick’s share of Nevada Gold Mines in the third quarter, up from 535,000 ounces, and Barrick reported total NGM production was 875,000 ounces in the quarter, up from 870,000 ounces in the 2019 quarter.

NGM’s production in the 2020 quarter was affected by autoclave maintenance at Carlin, reliability upgrades and lower recoveries due to ore blend, and at Turquoise Ridge it was affected by equipment availability and utilization, but Barrick stated strategies are in place to improve production at Turquoise Ridge.

The third shaft at the underground Turquoise Ridge operations is still on schedule and within budget to provide increased hoisting capacity, more ventilation and shorter haulage distances, according to Barrick, which reported the shaft is expected to be commissioned in late 2022.

Bristow also said the Phoenix Mine near Battle Mountain is on track to achieve the upper end of production guidance, and Long Canyon near Wells “had another good quarter.” The temporary hold on expansion permitting continues as NGM does additional studies.

Bristow said that two quarters into the COVID-19 pandemic, results show Barrick has effectively dealt with the impact of the virus on its business, its people and the communities where the company operates, spending $25 million in host countries.

He pointed to the I-80 fund developed by Nevada Gold Mines for small businesses impacted by COVID-19 restrictions in communities where NGM is involved, and he said the idea has been replicated in Canada, the Dominican Republic and Africa.

Bristow also said NGM has been inviting legislators to visit gold operations in Nevada in the aftermath of resolutions in a special legislative session to increase mining taxes. He said the resolutions were a surprise move after NGM offered to pay net proceeds in advance to help the state in its pandemic-related budget crisis.

He said he was optimistic there will be a solution that “works for everyone.”

Another Barrick focus is on developing its workforce locally throughout its regions and providing educational opportunities, including in Nevada, where NGM recently announced a $2.2 million investment in digital education for schools in partnership with Discovery Education and the Nevada Department of Education, according to Darian Rich, group human resources executive.

Barrick also reported adopting a new global closure standard and opportunities for economic opportunities during closures, such as at the Golden Sunlight Mine in Montana.

Catherine Raw, chief operating officer for North America, said the closure strategy has created new business opportunities for Barrick, “like the Golden Sunlight Mine tailings reprocessing project. This involves the conversion of waste material into sulfur feedstocks for Nevada Gold Mines’ roasters and autoclaves while using the leftover benign materials as pit backfill.”

She said the project “will reduce environmental liabilities and thus cut closure costs at Golden Sunlight while creating more value for Nevada Gold Mines and other stakeholders.”

Newmont Corp.

Newmont Corp. posted adjusted net income of $697 million, or 86 cents per share, for the third quarter, compared with $292 million, or 36 cents per share, in the 2019 quarter, and the company reported record free cash flows with help from higher gold prices.

Free cash flow totaled $1.3 billion in the quarter, and Newmont President and Chief Executive Officer Tom Palmer said in an earnings teleconference that this was “the most in one quarter in Newmont’s history.” Newmont was incorporated in 1921.

Free cash flow in the 2019 quarter was $365 million.

Net income from continuing operations was down, however, in the quarter at $611 million, or 76 cents per share, compared with $2.23 billion in the third quarter of last year.

The company stated that the high net income in the 2019 quarter was due in part from a recognized gain from formation of Nevada Gold Mines, the joint venture of Barrick Gold Corp. and Newmont, and the 2020 quarter was impacted by lower sales volumes because of the sale of Kalgoorlie in Australia and Red Lake in Canada and higher costs due to the COVID-19 pandemic.

Newmont’s production in the quarter totaled 1.54 million attributable ounces of gold at a cost applicable to sales of $756 per ounce and an all-in sustaining cost of $1,020 per ounce, compared with production of 1.64 million ounces in 2019 at a cost applicable to sales of $733 and an all-in sustaining cost of $987 per ounce.

The company also produced 273,000 ounces of attributed gold equivalent ounces from co-products, including copper.

Colorado-based Newmont reported its share of gold production from the Nevada Gold Mines joint venture that is 38.5% owned by Newmont at 62.5% owned and operated by Barrick was 337,000 ounces in the third quarter, produced at a cost applicable to sales of $761 per ounce and all-in sustaining cost of $904 per ounce.

Newmont’s share of Nevada Gold Mines production in the 2019 quarter was 344,000 ounces. The 2019 third quarter was the first one after NGM became official on July 1, 2019.

Revenue companywide was up 17% over the 2019 quarter at $3.17 million, which Newmont attributed to higher average realized gold prices, partially offset by a lower volume of gold sales.

The average realized gold price was $1,913 per ounce, up $437 per ounce from the $1,476 price in the 2019 quarter, and Palmer said Newmont continues to see $400 million in revenue from every $100 increase in the gold price above a base of $1,200 per ounce.

Palmer said Newmont has eight top tier operations in the best mining jurisdictions in the world, and “I firmly believe we have the right size portfolio.”

Newmont has $4.8 billion in consolidated cash, and Chief Financial Officer Nance Buese said in the teleconference the company would spend money paring down debt, share buybacks, dividends for shareholders and re-investing in the business. She also said Newmont wants to keep a higher balance than normal because of the pandemic.

With the higher gold prices and higher cash flow, Newmont’s board declared a dividend to 40 cents per share, up 60% from the dividend of 25 cents per share in second quarter of this year. The company stated the dividend is the highest in the gold sector.

“This is the second increase to our dividend in 2020 and reflects the strength of Newmont’s portfolio to pay a higher dividend while we continue to advance profitable projects and maintain financial strength and flexibility,” Palmer said in the dividends announcement.

The company reported continued efforts to manage the COVID-19 pandemic, including testing, quarantining and contact tracing procedures companywide. Newmont reported COVID-19 specific costs totaled $32 million, and the company spent $35 million in case and maintenance costs as several mines ramped back up after pandemic shutdowns.

Chief Operating Officer Rob Atkinson told those on the earnings call that the first autonomous haul trucks at the Boddington Mine in Australia will arrived in December, and his rundown on mining operations include the comment that the Cerro Negro Mine in Argentina has the “potential to become the largest gold producer in South America.”

Cerro Negro has been running at 65% capacity currently because of COVID-19 travel restrictions in Argentina, according to the earnings report.

Kinross Gold Corp.

Kinross Gold Corp. reported adjusted net earnings for the third quarter of $310.2 million, or 25 cents per share, nearly triple the adjusted net earnings for the 2019 quarter of $104 million, or 5 cents per share, with high gold prices helping the bottom line.

Net earnings totaled $240.7 million, or 19 cents per share, compared with $60.9 million, or 5 cents per share, in the third quarter of last year, and adjusted cash flow rose to $549.6 million, up from $295.4 million in the 2019 quarter.

The average realized gold price was $1,908 per ounce, compared with $1,467 in the 2019 quarter.

“Kinross delivered another strong quarter, generating robust free cash flow and a significant increase in earnings,” said J. Paul Rollinson, the president and chief executive officer of Toronto-based Kinross. “Our mines continued to perform well as our global teams have effectively managed the operational challenges cause by the COVID-19 pandemic,” he said.

The Kinross board declared a quarterly dividend of 3 cents per share. Kinross had announced in September plans to pay a regular quarterly dividend.

Rollinson stated in the earnings report that because of the strong quarter, Kinross is on track to meet the company’s guidance and costs for the ninth consecutive year. Kinross expects to produce 2.4 million gold equivalent ounces in 2020 at cost of sales of $720 per ounce and all-in sustaining costs of $970 per ounce.

In an Oct. 20 update on the company’s production profile, Kinross stated that it expects to produce an average of roughly 2.5 million gold equivalent ounces per year for 2020 to 2029, driven by promising opportunities across its global portfolio, with a 20% increase from 2021 through 2023.

“Kinross has a diverse global portfolio with top-tier assets that have long mine lives, complemented by a large mineral reserve and resource base. The reinvestments in our portfolio, continuous improvement initiatives and exploration programs have enabled us to add lower cost and lower risk projects that leverage existing infrastructure and enhance our long-term production profile,” Rollinson said in the update.

The outlook for more production for 2021-2023 includes higher anticipated gold production from the north area of the Bald Mountain Mine in Nevada and the Phase S extension at the Round Mountain Mine, also in Nevada, as well as projects elsewhere.

Andrea Freeborough, senior vice president and chief financial officer for Kinross, said in the earnings call that the third quarter was the strongest year to date, and “we expect this trend to continue into Q4.” She also said that at current gold prices, Kinross expects to approach zero net debt at the end of 2021.

For the third quarter, Kinross produced 603,312 gold equivalent ounces at a cost of sales of $737 per ounce and all-in sustaining cost of $958 per ounce, with Nevada production totaling 125,378 ounces, up from 116,190 ounces in the third quarter of last year.

Round Mountain Mine in Nye County produced 76,039 ounces in the quarter, compared with 82,195 in the 2019 quarter, and Bald Mountain Mine in White Pine County produced 49,339 ounces, up from 33,995 ounces last year.

Kinross reported that Round Mountain’s production was largely in line with the second quarter of this year, with cost of sales decreasing mainly due to lower contractor costs. Production cost of sales for equivalent gold ounces was $683, down from $705 last year.

The lower production total compared with last year was primarily due to lower mill grades, partially offset by higher ounces recovered from the heap leach pads, Kinross stated.

Bald Mountain’s production rose in the third quarter over the 2019 quarter as more ounces were recovered from the Vantage Complex heap leach pad due to higher grades. The production cost of sales was $856 per ounce, up from $813 last year.

In Alaska, the Fort Knox Mine produced 72,705 ounces in the quarter, up from 54,027 ounces in the 2019 quarter, and Kinross reported work on infrastructure and processing facilities is substantially complete on the Fort Knox Gilmore Project, with first ore placed on the new pad in early October.

Kinross also acquired a 70% interest in the open pit Peak Project in Alaska on Sept. 30 for $93.7 million, and the company expects to process Peak ore at the Fort Knox mill. Blending higher grades from Peak with Fort Knox ore is expected to extend mill operation at Fort Knox, reduce overall costs and increase cash flow, according to the company.

Production is slated to begin at Peak in 2024.

The company stated that the project is expected to benefit state and local communities, especially the Upper Tanana Athabascan Village of Tetlin.

Kinross also announced that the Tasiast 24k Project in West Africa and projects in Russia are advancing, as are projects in Chile.

Paul Tomory, executive vice president and chief technical officer, said the company’s portfolio of operations “continues to manage very well through COVID-19. We acted early and took important measures that have allowed us to minimize the impact of it on our business, and we continue to adjust to the new normal.”

Hecla Mining

Hecla Mining Co. reported a good third quarter, with adjusted net income of $24.23 million, or 5 cents per share, up from $11.8 million loss, or a loss of 2 cents per share, in the 2019 quarter, with the help of higher silver and gold prices.

Phillips S. Baker Jr., president and chief executive officer of the Coeur d’Alene, Idaho-based company, said that “because of our strong operating performance and higher prices” the company had the highest free cash flow in a decade.

Free cash flow was $49.75 million, compared with $28.8 million in the third quarter of last year, and Hecla stated that net income attributable to shareholders was $13.5 million, or 3 cents per share, up from a loss of $19.66 million, or 4 cents per share, in the third quarter of last year.

“With the Lucky Friday ramp-up ahead of schedule, the expected improvements at Casa Berardi and our modest planned capital expenditures, we are well positioned to further strengthen our balance sheet, increase exploration activities and pay our enhanced dividend,” Baker said.

The realized silver price for the quarter was $25.32 per ounce, up from $18.18 per ounce in the 2019 quarter, and the realized gold price was $1,929 per ounce, up from $1,475 last year in the third quarter.

Silver production for the quarter totaled 3.54 million ounces and gold production was at 41,174 ounces in the quarter, compared with 3.25 million ounces of silver and gold production of 77,311 ounces in the 2019 quarter.

Nevada production will not be realized until 2021, Hecla reported. Ore mined during the third quarter from Fire Creek near Crescent Valley has been stockpiled for third-party processing by Nevada Gold Mines expected in the fourth quarter. Hecla also stated that mining of oxide ore is substantially completed, but mining of refractory ore is expected to continue through the remainder of this year.

Hecla said the production from the processing of refractory ore is expected to total roughly 5,000 ounces, and exploration is under way at Midas in northern Elko County. The earnings report stated that exploration involves four core rigs that will continue operating through November testing high-priority targets at Midas.

Baker said in the earnings teleconference that the company has increased exploration capital to $16 million this year, with “more than half of the fourth-quarter spending in Nevada.” The work will be mainly at Midas, and he said that “we’ve got some development to do to be able to really put ourselves in position for the exploration that we need to do at Fire Creek.”

The Greens Creek Mine in Alaska produced 2.63 million ounces of silver and 12,838 ounces of gold in the third quarter, compared with 2.5 million ounces of silver and 13,684 gold ounces in the 2019 quarter. The Lucky Friday Mine in Idaho produced 636,389 ounces of silver, compared with 541,636 silver ounces and 4,699 gold ounces last year.

San Sebastian produced 266,691 ounces of silver and 1,931 ounces of gold in the third quarter, compared with 541,636 ounces of silver and 4,699 ounces of gold in the 2019 quarter. Mining at San Sebastian was completed in the third quarter and milling is expected to be completed in the fourth quarter, according to Hecla.

Casa Berardi in Quebec produced 26,405 ounces of gold, compared with 36,547 ounces in the 2019 quarter, with the drop in production mainly due to lower mill throughput resulting from downtime for major maintenance that took longer than planned, Hecla stated. The lower production also was impacted by a delay in the availability of higher-grade stopes at the underground mine.

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Baker also reported that Hecla has a couple of programs under way related to the COVID-19 pandemic. To support local businesses, Hecla is giving employees vouchers they can spend with businesses to inject money into the communities where they live.

Hecla also brought a COVID-19 laboratory for testing to Juneau, Alaska, because currently testing done in Alaska has to go to the lower 48 states for results. The testing in Juneau will shorten quarantine times, Baker said.

“We are offering key government organizations like first responders the opportunity to get one-day turnaround, and this is going to be critical when the legislative session starts in January,” Baker said of the Alaska lab.

Coeur Mining

Coeur Mining Inc. announced adjusted net income for the third quarter of $38.2 million, or 16 cents per share, compared with a loss of $5.3 million, or a loss of 2 cents per share, in the third quarter, and increased revenue helped by higher gold and silver prices.

Net income for the quarter for the Chicago-based company was $26.9 million, or 11 cents per share, compared with a loss of $14.3 million, or a loss of 6 cents per share, in the 2019 quarter.

“Strong production growth and higher gold and silver prices combined to generate multi-year high financial results during the third quarter,” the company’s president and chief executive officer, Mitchell Krebs, said in the earnings report.

Revenue totaled $229.7 million, up from $199.5 million in the 2019 quarter, with the average realized gold price at $1,754 per ounce and the silver price, $24.15 per ounce. The average realized price for Coeur for gold in the 2019 quarter was $1,413 per ounce and for silver, $17.17.

Coeur has hedged gold to support expansion at the Rochester Mine in Nevada.

Free cash flow rose to $56.5 million from $11.3 million in the 2019 quarter, Coeur reported.

The company produced 95,995 ounces of gold in the third quarter, compared with 99,782 ounces in the 2019 quarter, and 2.6 million ounces of silver, down from 3 million in the third quarter last year.

Krebs said that the expansion project at the Rochester Mine began on schedule in early August, advancing early-stage earthworks and establishing the infrastructure on site to support construction activities.

The silver and gold Rochester Mine near Lovelock will construct a new leach pad, a new crushing facility equipped with two grinding roll units, a Merrill-Crowe process plant and related infrastructure to extend mine life, according to the company.

Coeur stated that together with SNC-Lavalin as the engineering, procurement and project contractor, the company has completed more than 75% of the detailed design work for the project, and major construction should begin in 2021 and be largely completed by late 2022.

Rochester produced 700,400 ounces of silver in the third quarter, down from 982,000 ounces in the third quarter of last year, and 6,462 ounces of gold, down from 7,901 ounces in the 2019 quarter, at a cost applicable to sales of $19.10 per silver ounce, and an adjusted silver cost of $14.98 per ounce. The third-quarter 2019 cost applicable to sales was $27.70 and the adjusted cost was $14.24.

The adjusted cost of applicable sales for gold at Rochester was $1,148 per ounce, compared with $1,230 in the 2019 quarter, according to the earnings report.

Wharf in South Dakota produced 33,440 ounces of gold in the third quarter, up from 25,946 ounces last year in the third quarter, and 41,000 silver ounces, up from 17,000 in the 2019 quarter, while the Palmarejo Mine in Mexico produced 29,296 gold ounces, down from 31,779 ounces, and 1.78 million ounces of silver, up from 1.72 million ounces in the 2019 quarter.

Kensington in Alaska produced 26,797 ounces of gold in the quarter, down from 35,452 ounces in the same quarter of last year, according to Coeur.

According to Coeur, exploration at Rochester shows significant potential for additional reserve and resource growth at the existing open pit and at East Rochester, and priorities for future drilling will include north of East Rochester and East Packard, as well as around the Lincoln Hill, Gold Ridge and Independence Hill zones west of the Rochester Mine.

Coeur reported that in addition to exploration at mine sites, up to three rigs were active at the Crown exploration property in southern Nevada during the second quarter, drilling 23,465 feet. Coeur has the Sterling and Crown properties northeast of the historic Sterling Mine near Beatty.

“With strengthening operational performance, successful execution of our near-term organic growth opportunities and a sustained commitment to our exploration investments, we remain on track to fundamentally reposition the company and unlock meaningful long-term value for our stockholders,” Krebs said.

McEwen Mining

McEwen Mining Inc. reported a net loss of $9.8 million, or 2 cents per share, for the third quarter, compared with $11.5 million, or 3 cents per share, in the third quarter of last year, and Rod McEwen, chairman and chief owner, said the company’s operations are “starting to turn around and improve.”

Cash and liquid assets totaled $18.8 million at the end of the quarter and working capital was at $21.6 million.

McEwen said in the earnings announcement that “the financial pressure on our balance sheet has been alleviated and our future growth is becoming much brighter.”

“Investment capital is still in the early stages of moving into precious metals. There are a number of companies that are still being largely ignored but appear to have considerable upside potential. I believe McEwen Mining is one of those companies whose share price has a lot of catching up to do,” he said.

Looking back on the Toronto-based company’s operations last year, McEwen said the year was a “nightmare and as shareholders we all suffered great frustration over the large loss of share value at a time when the price of gold was climbing ever higher. Our problems were many, some due to non-recurring events and others were operational.”

McEwen said that “senior management at both head office and at our mines are focused on improving operating efficiencies and profit margins. Over the next several quarters we expect to deliver better operating results along with exploration news that we hope will start to close the price performance gap.”

Gold production totaled 23,100 ounces and silver production was 575,000 ounces, compared with 35,000 ounces of gold and 947,000 ounces of silver in the third quarter of 2019, but production is rebounding after temporary suspensions due to COVID-19 in the second quarter.

Gold equivalent production was 30,400 ounces in the quarter, compared with 45,900 ounces last year.

At Gold Bar in Eureka County, the third-quarter gold equivalent ounces produced totaled 5,800 ounces, down from 11,000 ounces in the 2019 quarter, according to the earnings report, which shows all-in sustaining costs of $1,769 per ounce and cash costs of $1,585 per ounce.

Operations at Gold Bar continued to ramp up during September and savings from operational improvement initiatives are taking effect, the company stated, citing as an example lower contractor and unit mining costs per ton of ore and waste moved dropped from $3.42 per ton in the second quarter to $2.45 per ton in the third quarter.

McEwen Mining also reported that evaluation of the resource estimate at Gold Bar continued in the third quarter, and the company expects new resource and reserve estimates and an updated feasibility study in the current quarter.

Peter Mah, chief operating officer, said the recently completed 28-hole drill program designed to update some of the Pick deposit mineral resources from the inferred category to indicated appear positive, according to an earnings call transcript.

Permitting also is under way for Gold Bar South.

The company reported spending $8.5 million on exploration in the third quarter.

In addition to Gold Bar, McEwen Mining produced 5,800 gold equivalent ounces at Black Fox at Timmins in Canada, where the company reported development of the access to the Froome underground deposit had advanced 47% by the end of the quarter.

The company expects to reach the deposit in the second quarter of next year, with production expected in the fourth quarter of 2021.

A preliminary economic assessment is under way for the Fox Complex that includes Grey Fox, Black Fox, Stock and Lexam resources to all use existing or potentially expanding milling capacity.

Production in the third quarter also came from the San Jose Mine in Argentina, where McEwen has a 49% interest. The company’s share was 15,900 gold equivalent ounces in the third quarter. Government-imposed COVID-19 travel restrictions limited the mobilization of personnel, which limited operations to below normal.

From the El Gallo Mine in Mexico, McEwen Mining received 1,900 gold equivalent ounces from residual leaching while an updated feasibility study for the Fenix Project is being finalized, according to the company.

Franco-Nevada

Franco-Nevada Corp. reported net income of $153.9 million, or 81 cents per share, in the third quarter, a new record compared with net income of $101.9 million in the 2019 quarter, and the royalty and streaming company announced acquisition of 25 new royalties in the quarter.

The new royalties bring the number of mining-related assets to 316 for Toronto-based Franco-Nevada.

President and Chief Executive Officer Paul Brink said in the earnings report that “it was exciting for the future to see the level or organic growth across our portfolio, advanced and exploration assets.”

Franco-Nevada’s revenue rose 19% to a new record of $279.8 million, with 91.9% coming from gold and silver equivalents and additional mining assets and 8.1% from energy. The company reported energy assets benefitted from a rebound in oil and gas prices.

Adjusted net income was $152.3 million, or 80 cents per share, compared with $101.6 million, or 54 cents per share, in the third quarter of last year.

The company stated that there were 134,817 gold equivalent ounces sold in the quarter, up from 133,219 ounces in the 2019 quarter, and it expects attributable royalty and stream sales from mining assets to be near the high end of the previously provided guidance of 475,000 to 505,000 gold equivalent ounces for this year.

Franco-Nevada’s board declared a quarterly dividend of 26 cents per share.

Franco-Nevada’s royalty interests in Nevada include Nevada Gold Mines’ Goldstrike Mine and South Arturo near Goldstrike, and the earnings report stated that there were very positive drill results from expansion drilling at the El Nino underground mine at South Arturo reported in September.

In the teleconference, Brink said Goldstrike is the company’s most substantial net profits interest.

“We haven’t seen as much as we’d like from the Goldstrike NPI this year, with the Goldstrike material being fed to the mill at a slower rate, but that does leave more material for the future,” he said.

“We have a variable rate royalty on Premier Gold’s and Nevada Gold Mines’ South Arturo Mine that we estimate will be 6% on the sulfide material. On the prior reserves, we expect South Arturo to contribute for the next four years, although they have now discovered material extensions to the El Nino underground that will likely extend mine life when they update reserves and resources at year-end,” Brink said.

Franco-Nevada also has royalty interests in other Nevada operations, including Gold Quarry, Marigold, Bald Mountain and Robinson Mine.

On COVID-19, Franco-Nevada stated it supports measures to address the COVID-19 pandemic and continues to monitor the impact of the pandemic on its portfolio of assets. There are no known cases within the company.

“Our partners at our royalty and stream assets have done a great job managing the COVID-19 pandemic and implementing the necessary safety protocols and procedures, while delivering excellent operating performance,” Chief Financial Officer Sandip Rana said in the earnings presentation.

Argonaut Gold

Argonaut Gold Inc. reported adjusted net income of $12.2 million, or 4 cents per share, in the third quarter, a quarter that saw the closure of the at-market merger with Alio Gold that included the Florida Canyon Mine in Nevada.

The adjusted net income compares with $6.5 million, or 3 cents per share, in the 2019 quarter.

Net income for the quarter was $13.4 million, or 5 cents per share, compared with $4.9 million in the 2019 quarter, and the Toronto-based company reported revenue of $94.4 million, up from $66.8 million in the 2019 quarter.

“It was an extremely busy third quarter for the company,” said Argonaut President and Chief Executive Officer Pete Dougherty, who reported on financing accomplished and an agreement for the sale of the Ana Paula Project in Mexico to AP Mining for $30 million, a $10 million Canadian dollars contingent payment, 1% net smelter returns royalty and 9.9% equity in the acquiring company.

He also said that “after acquiring the Florida Canyon Mine at the beginning of the third quarter, we have begun to implement modifications to the crushing and staking circuit, which we expect to lower operating costs. We expect these modifications to be completed in the first half of 2021.”

The company reported quarterly gold production of 48,951 ounces at a cash cost of $1,008 per ounce and all-in sustaining cost of $1,401 per gold ounce sold, an increase from 44,303 ounces in the 2019 quarter due to ounces from Florida Canyon offset by decreases in Mexico.

Florida Canyon at Imlay produced 11,289 gold equivalent ounces in the quarter.

The third quarter was the first for Argonaut at Florida Canyon after the acquisition of Alio, so the company stated it was not making comparisons to earlier quarters there.

The company reported that quarterly production was impacted primarily by a delay in permitting to allow for solution to the newly constructed leach pad and mining of low-grade material that was previously backfilled into a pit during historical operations.

Argonaut operates the El Castillo Complex in Mexico that produced 26,690 gold equivalent ounces and La Colorada in Mexico, which produced 11,289 gold equivalent ounces.

The company stated that the lower production at the mines in Mexico was due to a drop in ore to leach pads during the second quarter, when mining, crushing and stacking activities were on shutdown because of the pandemic. There also were weather challenges.

“In spite of the rainy season, from a production standpoint, we managed to get the required ore tonnes (metric tons) to the leach pads during the third quarter, which leads us to believe the fourth quarter will be our strongest quarter of 2020,” Dougherty said.

The average realized gold price for Argonaut was $1,915 per ounce, up from $1,474 in the 2019 quarter.

The company reported continued COVID-19 support for communities surrounding its operations in Mexico, including safety training, donation of hygiene supplies and the sanitization of homes and local businesses, as well as a donation to a Red Cross station and food baskets in communities surrounding operations.

Royal Gold

Royal Gold Inc. announced a profit of $106.9 million, or $1.63 per share, for the quarter ending Sept. 30, the first quarter for its fiscal year, on revenue of $146.9 million. Revenue for the royalty and streaming company was up 23.7%.

“Consistent performance from across our operating portfolio combined with strong metal prices led to record revenue this quarter,” said Bill Heissenbuttel, the president and chief executive officer of Royal Gold.

Denver-based Royal Gold reported an average told price of $1,909 per ounce in the quarter, up 29.7% over the 2019 quarter.

Royal Gold has royalties on Nevada mines, with Cortez the main one. The company reported revenue of $5.68 million on 37,600 ounces of gold produced from its royalty holdings at Cortez, which is part of Nevada Gold Mines, compared with $4.42 million from 35,100 ounces in the 2019 quarter.

Royal Gold has other production royalties in Nevada, including at Bald Mountain, Robinson, Twin Creeks, Goldstrike, Leeville, Marigold and Relief Canyon.

Adjusted net income was $53.8 million, or 82 cents per share. Royal Gold stated that the adjustments included a one-time 52-cent per share gain on the sale of its Peak Gold interest in Alaska, and adjustments for taxes and a change in fair value of equity securities.

The company divested its interest in the Peak Gold Project in Alaska and its common share position in Contango Ore Inc., the company’s joint venture partner in Peak Gold Ltd. Kinross Gold Corp. acquired Peak Gold and plans to mine there and process the ore at its Fort Knox Mine.

“We worked over the past five years to define the value of the resource, and the time came this year to transfer our interest to a company with permitting, development and operating capability. Kinross, with a long and successful history of operating responsibly in Alaska was the ideal candidate”, Heissenbuttel said in the earnings teleconference.

“We received cash of $61 million for our project interest and equity in our JV partner, and we also received additional royalty interest on the Peak Gold land package, which is in line with our core business,” he said.

Heissenbuttel said that with the sale, Royal Gold can refocus efforts on the core business, and Kinross Gold’s integration plan with Fort Knox may shorten the time before Royal Gold receives royalties from production.

“While we don’t intend to take direct ownership in projects again, we believe our approach at Peak was successful, and we remain exposed to this high-quality project through royalty interests, consistent with our strategy,” he said, according to a transcript of the teleconference.

Royal Gold has interests in 188 properties on five continents, including interests in 40 producing mines and 17 development stage projects.

 By Adella Harding

Gh Extractives

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