Gold price hits COVID-19 speed bump, silver hits wall

New York (Aug 19)  With COVID-19 production disruptions mostly affecting Q2, a survey of top gold and silver miners showed a stark difference in the effect.

In the spring, Quebec, South Africa and several Latin America countries announced siginificant COVID-19 closures, which impacted miners operating in those regions.

With some exceptions, gold miners had diversified operations worldwide, which balanced the disruption. With most silver operations based in hard hit Latin America, silver production showed a sharper decline.

Last week Barrick showed lower production in Q2 but said it is on track to achieve its annual production guidance despite the COVID-19 impactYear-to-date gold production of 2.4 million ounces, which is right around the mid-point of its 4.6 million to 5 million ounce 2020 guidance. Gold production at Barrick’s Veladero was impacted by the Argentine government’s pandemic quarantine restrictions.

At Newmont, the company produced 1.3 million attributable ounces of gold in the second quarter, down about 21% compared to the second quarter of 2019.  Mexico-based Peñasquito, Quebec-based Éléonore and Ontario-based Musselwhite were temporarily placed into care and maintenance after COVID-19 mandated closures. 2020 production and cost outlook at Newmont is unchanged from previous guidance.

Agnico-Eagle was also challenged due to its Canadian Malartic Mine being based in Quebec.

Some miners escaped with minimal impacts. B2Gold (NYSE:BTG) announced consolidated gold production of 239,574 ounces in Q2, down 5% from its 250,632 ounces announced in the previous quarter. The intermediate gold miner is headquartered in Vancouver. It has mines in Namibia, Nicaragua and Philippines.

Kirkland Lake Gold’s production was largely flat, 329,770 ounces in Q2 compared to 330,864 ounces in Q1.

Turning to silver Pan American Silver said the global COVID-19 pandemic had a significant impact on Q2 results. Production was 2.8 million ounces, down from 6.4 million during the same quarter a year ago. The company said most operations are back online, but warned of the "humanitarian crisis" due to the pandemic.

SSR Mining saw a sharp drop. Going forward, the company warned that all sites remain exposed to potential COVID-19 impacts.

First Majestic production was lowered by a third and higher at several operations. Looking forward, CEO Keith Neumeyer said operations are back to pre-pandemic production rates and our focus for the second half of 2020 is to try and fully recover the lost ounces due to the shutdown.



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