Gold Production in Latin American Mines Drops in 2Q22

Gold production in the 10 main gold-producing mines in Latin America saw a decrease in 2Q22 compared to 2Q21. Production stood at 1.10Moz, a 5.5 percent fall compared to the 1.16Moz of 2Q21 and less than the 1.12Moz of 1Q22.

According to a BNamericas report, five mines experienced a significant production decrease and two registered considerable increases. The production in three other mines remained at practically the same production level.

Major Latin American mining corporations forecasted a strong contraction in gold production for 2022, with operations mainly being affected by lower grades and reserves.

Only the mines that published their 2Q22 production rates are included in the list, two out of 10 did not provide their forecasts. The mines producing less are Pueblo Viejo in the Dominican Republic, Paracatu in Brasil, Peñasquito in Mexico, Merian in Surinam and Herradura in Mexico. Nonetheless, El Limón-Guajes in Mexico and Veladero in Argentina flaunted production increases. Fruta del Norte in Ecuador, Cerro Negro in Argentina and Yanacocha in Peru did not experience any variation in their production.

Pueblo Viejo is the biggest gold-producing mine in Latin America. Here, production fell from 195,000oz in 2Q21 to 175,000oz in 2Q22. Gold production in Torex Gold’s El Limón-Guajes mine registered an increase from 118,054oz in 2Q21 to 123,185oz in 2Q22.

In 1Q22, leading Mexican gold miners saw their production diminish compared to the past year. The 12 main producers showed a combined output of 714,199oz, a 11.8 percent drop compared to the 809,735oz produced by 11 companies in 1Q21. Seven out of the 12 corporations registered lower output at their Mexican operations, four posted an increase and one reported stable production. Although production dropped, most of the companies still expect to meet their original guidance for 2022.

Experts argue that since Mexico ranked as the world's seventh-largest gold producer in 2021, it could therefore benefit greatly from higher gold prices. Nevertheless, a drop in production could hamper its gains. In 2022, Mexico is expected to produce 3.03Moz of gold, showing a decrease of 7.5 percent compared to the 2021 gold production of 3.27Moz, according to estimates made in conjunction with the 19 main gold producers in the country and reported by BNamericas.

The general decrease in production is due to lower grades and mine closures at two of Mexico's largest gold producers, Newmont and Fresnillo. However, experts believe that Mexico could compensate for the production drop since 6 of the 19 companies considered in the estimate are expected to increase production.