RENO, Nev. — It's been an up-and-down year for gold. The shiny yellow metal that powers the economy of northeastern Nevada has swung from a low of $1,238 an ounce to a high of $1,552 in 2019.
It's also been an up-and-down year for the state's newly created and largest mining company — Nevada Gold Mines, the joint venture with Barrick Gold and Newmont Gold Corp.
The merger, decades in the making, blended the substantial Nevada assets of the two largest companies in northeastern Nevada. Managing more than 7,000 employees and allaying employee trepidations about the effects of the merger has been challenging for Greg Walker, Nevada Gold Mines' executive managing director.
Yet with many of the several intricacies of the merger in the rearview, the New Year brings an opportunity for the more than 7,000 employees of NGM to refresh and begin solidifying into one cohesive team, Walker says.
“This year has been really hectic pulling the joint venture together and getting everybody on the same page. Next year is going to be about unifying 7,000 people into one team with the vision to maximize value for the organization,” he says. “We covered a lot of ground in the last 12 months and have been through a lot of ups-and-downs.
“The biggest issue we've had is the 7,000 employees that have had a degree of uncertainty for the past six months (since the merger became official). They've been fearful that they would not be employed, and I'm looking forward to the end of this year when we finally put all that to bed.
“Everyone realizes that there is not going to be thousands of people losing their jobs.”
NGM expects to mine between 3.5 million and 3.8 million ounces annually from the combined Nevada operations, which includes seven mine sites. There also are a number of development projects underway that are expected to help the company solidify its five-year business plan, Walker says.
At the Rita K deposit near the Leeville underground mine, work is going on to wrap up geotechnical and other studies that will help bring the deposit into the company's 10-year life-of-mine window.
At Long Canyon, the company's newest project on the flanks of the Pequop Mountains east of Wells, NGM is in the midst of Phase 2 expansion plans that could potentially extend mining operations there another three years through 2027.
There will be additional tweaks and refinements to operations as teams continue down the integration path and adopt the “one-vision” game plan that will lead to many improved operational efficiencies, Walker says.
“We will get a lot of advantages from having one team sharing a common vision,” he says. “We are effectively running seven mines as one entity. We will have the opportunity for all those people to share among each other the best practices from each of their mines.
“We will be looking to increase our productivity through automation,” Walker adds. “We've been running automation at a lot of different sites, and the successes we've had will roll down into other mines. Another things that is exciting is we are going to try all electric underground equipment up at Turqouise Ridge.
“That will be a huge advantage to us (rather than using standard diesel equipment) if we can get that electric factory technology to work underground. It allows us to use more equipment underground because ventilation is not impacted (from diesel fumes). We can use more electric equipment underground, and it improves ventilation and the air conditions for employees.”
While the price of gold is never easy to peg, Walker expects upward pressure on the commodity in 2020. Markets could see the price rise as high as $1,600 an ounce, he says, due to factors already in play.
“We still don't have USA-China trade issues sorted out, and we still have instability in the Middle East,” Walker says. “And in the next 12 to 18 months, the supply of gold is not going to keep up with demand as people go for safe haven. There will be a lot more demand on gold and a lot of pressure on supply.”
With the price of gold north of $1,450 in early December, many Nevada miners are in expansion mode. Kinross Gold Corporation, operator of the Round Mountain mine located in the Big Smoky Valley of northern Nye County about 55 miles north of Tonopah, recently completed a major $445 million expansion project.
In 2018, the Round Mountain mine poured its 15th millionth ounce of gold. Toronto-based Kinross employs more than 800 miners at Round Mountain, which was part of Barrick Gold's portfolio until early 2016. Phase W expansion efforts at Round Mountain included building a 9 million-square-foot heap leach pad and new carbon-in-column plant, constructing a 10-bay haul truck shop, warehouse, wash bay and fuel island, and expanding the footprint of the current open pit mine. Some older infrastructure was removed to allow for expanded mining operations.
Construction and commissioning of the project was completed in the third quarter of 2019, and the project has been fully transferred to the operations team. Stripping and dewatering activities are expected to continue until late 2020. The Phase W project is expected to extend mining at Round Mountain by five years, with current mine life extending through 2027, and the project also increases life-of-mine production by 1.5 million ounces of gold.
Closer to home, the strength of the northeastern Nevada's mining industry continues to drive revenue at many Reno-Sparks businesses. Nick Ross, operations manager for Western Environmental Testing Laboratory on Greg Street in Sparks, says WETLAB has seen an uptick in its mining work due to the stability of gold prices.
As an environmental testing laboratory, WETLAB's mining work primarily focuses on processing water, soil and hazardous waste. It does a lot of regulated mining work as prescribed by the Nevada Department of Minerals or the Nevada Bureau of Mines.
WETLAB's mining revenue streams include water pollution control, reclamation and exploration efforts from mining claims. Ross expects those avenues of work to remain steady throughout 2020 — although continued efficiencies from the NGM merger could reshape that thinking.
“The Nevada Gold Mines venture, we will see how it changes the landscape of Nevada mining. It's two big corporations joining forces, and it will be interesting to see how that shapes up,” Ross says.
Though it's been a roller coaster year for NGM's Walker, as well as for thousands of employees of Barrick and Newmont — and even for the price of gold — it's still an exciting time, Walker says. Nevada is where it's at if you make a living as a hard rock miner.
“Being a gold miner in Nevada is the most exciting place to be,” he says. “Nevada is where all the action is, and we have massive potential to improve in this area. It's a really good time to be gold mining in Nevada.”
Rob Sabo is a Reno-based freelance writer and former reporter for the Northern Nevada Business View.
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