Merger mania swept the gold-mining industry in 2019 with more than US$33 billion worth of deals being inked. While trade fears lit a fire under bullion prices, they created headwinds for base-metals miners.

What’s ahead in 2020? In our fourth annual CEO year-ender, we asked the heads of some of the biggest miners for their outlooks. Based on interviews with the top executives from miners including Newmont Goldcorp Corp., Teck Resources Ltd. and Barrick Gold Corp., expect a big focus on environmental, social and governance issues and more consolidation.

Tom Palmer, Newmont

“We’re starting to see increasing expectations for transparency on (ESG) performance, not just at the portfolio level but going right down to the site level.”


• Geopolitical instability and declining global gold reserves may support “robust” gold prices over the medium term

• Like Barrick and Agnico Eagle Mines Ltd., Newmont assumes US$1,200/oz gold for planning purposes


• Palmer expects more consolidation of single-asset gold producers in 2020

• Gold mega-mergers, like those in the first half of 2019, are unlikely


• The biggest challenge in 2020 for the gold-mining industry is likely to be ESG

• So far, Palmer doesn’t think ESG ratings correlate with stock liquidity, but that’s the direction things are moving — “It’s a topic of conversation at just about every meeting we have”


• Having merged with Goldcorp and completed a JV with Barrick in Nevada, and then sold US$1.4 billion in assets, the focus for 2020 is delivering value on the remaining portfolio —  “Those two transactions really set Newmont up for the next several decades”

• Having merged with Goldcorp and completed a JV with Barrick in Nevada, and then sold US$1.4 billion in assets, the focus for 2020 is delivering value on the remaining portfolio

• No pressure to do M&A, but company will remain “opportunistic and selective” if the right buying opportunity appears

• Investing in the project pipeline and keeping a strong balance sheet are top priorities

• If the gold price stays elevated, Newmont is more likely to use dividends than buybacks to reward shareholders in 2020; this month’s buyback was a “unique opportunity”

• JV with Barrick in Nevada should have been done years ago

Richard Adkerson, Freeport

“We went to war together, we won the war, and now we’re moving forward.”


• U.S. tariffs on China knocked copper back since June 2018, with Brexit and weak U.S. manufacturing acting as additional headwinds

• Despite this, prices have been resilient and inventories of the key metal aren’t growing

• Higher prices are likely if trade tensions are resolved


• Production has been constrained; higher copper prices are required for new mines to be built

• Resource nationalism remains a challenge

• Disruptions around income disparity, such as those that triggered Chile’s recent protests, are on the rise

• M&A is likely in the sector longer-term, but requires clarity on copper price

• Institutional memory of poor deals in the past remains an impediment


• ESG concerns are an industry challenge; “the public discourse is rising”

• “Those sorts of issues are many times more challenging than the really challenging technical issues we face”


• After tough years in Indonesia, which he likened to a “war,” Freeport is focused on the transition to underground operations at the Grasberg deposit

• Within two years, cash flow should double and production surge

• Once that happens, the miner expects to use cash to cut debt and boost shareholder returns through dividends or stock buybacks

• The Lone Star project in Arizona will produce first copper in 2020

• Adkerson has no plans to retire

Mark Bristow, Barrick

“Gold has never, since the Bretton Woods agreement, been in such a good place.”


• Negative interest rates and looming global gold-production declines support US$1,400-US$1,500/oz prices


• More mining consolidation is still needed, especially in the gold sector


• Industry oversold because of ESG concerns

• Miners need to be more accountable and highlight “responsible development”

• “Just look out your window. If you took away everything that was mined you would just have a heap of rubble. And we, the mining industry, are very unloved”


• The priority is replacing and adding resources to ensure the company’s future beyond 10 years

• Once that’s done, more generalists will come into the stock

• Barrick can also look at long-term dividends once a 10-year plan is in place — “My objective is to get to a proper dividend policy”

• “I think there’s a place for share buybacks,” but they’re challenging in the gold industry because bullion producers already trade at a premium

• Headed for zero net debt in 2020, Barrick has plenty of cash to support ambitions

• Freeport is on its radar — but Barrick has no plans to rush into anything and would “never” go hostile

Don Lindsay, Teck

“One of best cures for low commodity prices is, of course, low commodity prices. Coal prices have been low for a few months now.”



• Negative sentiment is “overwhelming the fundamentals”

• “We know that a number of people are losing money now at these prices”

• Given China’s crackdown on polluters, the market is overestimating how much zinc concentrate will be turned into refined metal — “We think that the market is going to be much tighter than people expect”

• Lindsay expects stable or higher prices, but “group sentiment” could prove him wrong


• Copper fundamentals are also good but the price is unlikely to hit US$3.50/lb “anytime soon”

• A US$2.80-US$3/lb range is most likely for 2020

Metallurgical coal

• Prices should start to pick up given marginal producers can’t access capital and “are starting to shut down”

• “Unbelievable” strength in China steel production and falling inventories should provide price support into next year


• Investors don’t feel they have to own mining shares yet; that’s unlikely to change in 2020 given most expect weak growth


• Good ESG ratings don’t seem to boost valuations, but a bad rating can make investors shun a stock completely

• Teck’s ratings are good but it has to keep improving: “The bar keeps getting raised”


• Teck has plenty of liquidity and no significant debt due until 2035; announced stock buybacks will continue

• Lindsay is encouraged by the sales process for Zafranal, but wouldn’t comment further

• On M&A: “We’re not looking to buy anything, that’s for sure, and we haven’t started any process on selling any of the other satellite projects yet”

• Next asset to shed would be San Nicolas in Mexico, but not until prefeasibility is done in six months

• Canadian federal government has to make a decision on the Frontier oil-sands project by the end of February

Sean Boyd, Agnico

“I think what investors want to see is just continued conservatism in how companies are calculating reserves, which really drives the mine plans, which really drives the prospects for the business.”


• Gold has been in a bull market since 2015

• Retracement of the price since September is healthy; fundamentals are strong

• The US$1,480/oz range for gold is impressive given the record high stock market

• Boyd expects gold to breach US$1,550/oz next year and to test new high around US$2,000/oz in 2-3 years


• The greatest challenge for the industry is replenishing reserves

• Growth is tough, but “to grow in a way where you’re actually improving the quality of your underlying business is extremely difficult”

• Investors want the industry to use a conservative gold price in 2020 to count reserves

• More consolidation is needed and likely — “It’s extremely difficult to get capital to fund smaller and mid-tier businesses”


• Agnico launched an advocacy campaign to articulate the benefits of mining — “We see a bit of a vacuum in the Canadian mining space. The country used to be in a leadership position”

• Advocacy is important, post-federal election, to help shape resource policy


• Despite the recent wave of mergers, Agnico is under no pressure to do deals

• Not looking over shoulder for takeovers; the miner trades at a premium and it’s tough for competitors to argue they can run the assets better

• Agnico just hiked its dividend; has debt coming due in April

• With Nunavut mines built, the focus will be on generating free cash flow to reinvest in the business, pay down debt and hike dividends — “We’re going to do all of those things”