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The Globe and Mail

Newmont poised to oust Barrick as world’s top gold producer

A Newmont Mining haul truck at its Carlin gold mine operation near Elko, Nevada, U.S.

Rick Wilking/REUTERS

Newmont Mining Corp.'s Gary Goldberg has the title of world's biggest gold producer within his grasp.

The chief executive officer raised his 2018 production forecast to a range of 4.9 million to 5.4 million ounces. That exceeds Barrick Gold Corp.'s 2018 guidance of 4.8 million to 5.3 million given in February, which doesn't include the impact of the sale of 50 per cent of a mine in Argentina.

While Newmont is already ahead of Barrick by market value, the midpoints of the two companies' 2017 guidance indicate Barrick will keep Newmont at bay this year in terms of output. That's not the case in the following years.

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Growth was a central theme in Newmont's investor-day presentation in New York on Wednesday, with executives saying the company is better positioned to expand than peers.

In addition to growing existing operations in the Americas, Africa and Australia, it's pursuing greenfield exploration around the world, including in Canada's Yukon, Colombia, Peru, Ethiopia, Australia and the Guiana Shield.

In the last five years, the company has sold $2.8-billion in non-core assets, bought the Cripple Creek & Victor mine in Colorado, built three new mines and executed nine expansions, Goldberg said. "Taken together, we've added more than two million ounces of gold production at all in sustaining costs of about $750 per ounce."

By 2024, Newmont's global share of mined production will be 5 per cent, he said, compared with 4.4 per cent in 2015.

Newmont has also managed to extend its average mine life while lowering costs, with shareholders set to reap more of the benefits. The company is moving away from a dividend linked to the price of gold in a move that will result in at least a 50 per cent increase in payments, Chief Financial Officer Nancy Buese said.

Early this year, Goldberg said he would consider a dividend hike to lure investors from exchange traded funds.

Asked if the company has room for more production increases and lower costs, Goldberg said: "We've only just begun."

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