Newmont Goldcorp’s incoming CEO reports on a successful year
In the past 12 months Newmont Goldcorp has completed a major merger to become the largest gold producer in the world, fended off a hostile takeover bid by Barrick Gold Corp., entered into a joint venture with Barrick in Nevada to create Nevada Gold Mines and will soon have a succession at the chief executive position.
On Sept. 17, Newmont Goldcorp president Tom Palmer spoke at the Denver Gold Forum Americas and provided an update on the year. He will take the helm as president and CEO in October. He said his first priority will be “to continue to build on Newmont’s safety and sustainability discipline across our business.”
That business now includes a number of assets the company picked up with its acquisition of Goldcorp in April of 2019. During his presentation, Palmer said the company is making exceptional progress on its commitments and touched on work being done at many of the newly acquired projects.
“We are on track to deliver in excess of our initial synergy commitment of $365 million/year by 2021,” Palmer said. “In fact, we expect that 55 percent, or $200 million in run rate synergies will be achieved this year.”
Palmer said the company has realized an additional $50 million in savings from what was reported in the Shareholders Gold Council report and is well above the target rate of $85 million. But he said there is more work to do and that the company will “review, streamline and refine our support structure to ensure we are never complacent.”
The company previously announced that it is forging ahead with its planned sale of the Red Lake Mine, a former Goldcorp asset, and has fielded interest from about a dozen parties. He also said any additional sales would only come after careful study, and Newmont was ready to do more work to understand what value can be extracted from the assets.
“There are assets that we are looking to optimize, and we’ll spend two to even three years to understand them,” he told Bloomberg. “There’s absolutely no pressure to sell assets to generate cash.”
In an interview with Bloomberg Television, Palmer said there hasn’t been much discussion of mergers and acquisitions at the Denver Gold Forum. That runs counter to what some analysts were expecting before the conference. Newmont’s mega-merger with Goldcorp along with Barrick Gold Corp.’s purchase of Randgold Resources Ltd. helped drive mergers and acquisitions in the sector to $18.2 billion in 2019, the highest level in eight years, according to data compiled by Bloomberg.
Now companies are turning their focus to “managing their businesses,” Palmer said.
Palmer said Newmont Goldcorp has implemented its Full Potential program and the former Goldcorp sites including the Penasquito project in Mexico. There, he said, that within the last 10 weeks a team of experts has identified at least $50 million in quick-win improvements and additional upside from four key focus areas that have the opportunity to deliver in excess of $200 million in value.
Looking forward, Palmer said in the next three months the company expects to achieve commercial production at the Ahafo Mill Expansion, Quecher Main and Borden projects.
Our experience with Full Potential over the last seven years has shown that significant improvement is driven through good leadership, clarity on accountability, and a disciplined application of operational and technical rigor – these are the fundamentals that underpin Newmont’s exceptional operating and financial track record.
Photo: Tanami mill expansion, credit Newmont Goldcorp.