The five largest of the top gold producers yielded fewer ounces in the first quarter of 2021 on both an annual and quarterly basis. However, coming out of the pandemic-driven lockdowns of 2020, several of the smaller producers in the group increased first-quarter production.

While some of the largest miners recorded decreased gold production due to divestments or other factors, several smaller companies in the group of top producers increased production at existing operations or new assets. As the impacts of the COVID-19 restrictions begin to wane, many industry observers expect gold production to increase through 2021.

While the price of gold remains relatively high compared to historical levels, it also tends to fluctuate, so companies must carefully consider if the gold price will support new investments before bringing something online that might substantially grow production, Galbraith noted. "We had seen a lot shut down in 2020 due to the pandemic. So, 2021 is very much a story of recovery," S&P Global Market Intelligence analyst Christopher Galbraith said in a June 2 interview. "A lot of these operations that had to be shut down in 2020 due to the restrictions on movement are still bringing themselves back up to nameplate capacity."

"Right now, we're still in the kind of early days on testing the limits of the gold price," Galbraith said. "There's always going to be a lag time from that positive movement in the gold price to some of the larger players actually making decisions based on that."

The price of gold has been hovering around $1,900/oz in recent days. The price spiked above $2,000/oz in August 2020 before decreasing over the second half of the year. It retreated below $1,700/oz in March and steadily climbed to hit the $1,900/oz level in late May.

Overall gold production up, set to rise

According to a recent Market Intelligence analysis, global gold production totaled 24.8 million ounces in the first quarter of 2021, slipping quarter over quarter from 26.3 Moz while remaining higher than output in the first quarter of 2020. Market Intelligence expects an annual production increase of nearly 6% to around 105.9 Moz in 2021, up from 100.0 Moz in 2020.

HSBC Global Research analyst Jim Steel expects gold production to hit record levels in 2021 as the sector bounces back from the pandemic-related lockdowns. Based on costs and the high price of gold, miners are likely to continue to increase gold production, the analyst added.

"It appears that gold is well above levels that would encourage producers to seek maximum production, and it is likely to remain so," Steel said in a June 2 interview. "I can't see anything really denting production below $1,400/oz."

While gold mine production increased during the first quarter, total gold supply declined 4% year over year due to a drop in recycled gold driven by weaker gold prices and lower stocks, the World Gold Council noted in a report on quarterly operations.

Juan Carlos Artigas, head of research at the World Gold Council, said the organization expects recent historical trends to continue to push gold production upward.

"These are not sharp movements in terms of supply," Artigas said in a June 2 interview, referring to mine projects coming online. "Even when you look at what happened in 2020, the change was not super dramatic, even if there was indeed an impact with respect to COVID."

Trends vary by miner as assets shuffled

Some of the larger gold mining companies already completed major expansions in recent years through large, transformative acquisitions before the pandemic started.

"Barrick Gold Corp. and Newmont Corp., for example, they've already done their big acquisitions," Galbraith said. "While there is still the possibility of strategic acquisitions, over the past year, they have been making moves to identify which assets best suit their longer-term goals."

Toronto-based Barrick and Johannesburg-based AngloGold Ashanti Ltd. recorded the largest year-on-year decreases in quarterly output among the top producers, dropping by 149,000 ounces and 128,000 ounces, respectively. The companies agreed in August 2020 to divest their combined 80% stake in the Morila gold mine in Mali to Firefinch Ltd. The remaining 20% interest is held by the Government of Mali.

Barrick's output also continues to be impacted by the nonrenewal of a mining license for its 47.5%-owned Porgera joint venture that halted production in April 2020. Barrick recently signed a binding framework agreement with the Papua New Guinea government to restart the mine.

Barrick agreed to combine with Randgold Resources Ltd. in September 2018 and substantially increased its production footprint. On a May 5 earnings call, Barrick President and CEO Mark Bristow said making a new discovery is the "best way to create real value in this industry." The executive said the company has refocused and stepped up exploration since the merger as major growth projects progress.

AngloGold said in its first-quarter earnings report that 2021 and 2022 would be "key investment years for the business." The gold miner plans to invest in its operating assets while growing brownfields-related production over the next five years. The company recently withdrew its full-year 2021 gold production and delayed the planned ramp-up of its Obuasi gold mine in Ghana after an accident at the site resulted in a missing worker and the suspension of mine operations.

London-based Endeavour Mining Corp. recently acquired new gold assets from Semafo Inc. and Teranga Gold Corp., while Western Australian miner Northern Star Resources Ltd. recently acquired Saracen Mineral Holdings Ltd. Northern Star's first-quarter production footprint grew 54.4% year over year, while Endeavour's footprint jumped by 101.8%.

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Newmont, the largest gold producer globally, produced 1.46 Moz of gold in the first quarter, decreasing slightly by 1.6% year over year. However, the company recorded a 10.7% decrease in production quarter over quarter. Newmont said in its earnings release that the decrease was primarily due to the sale of its Red Lake complex in Ontario and lower mill throughput, ore grade or production levels at certain mines in the portfolio.

Newmont also recently closed an acquisition of the remaining 85.1% shares of GT Gold Corp. that it did not already own for $311 million. The deal will give the gold giant full control of the Tatogga gold-copper project in British Columbia. Newmont also expects other projects in its pipeline to improve production, lower costs and extend mine life.

PJSC Polyus decreased its first-quarter gold production by 6.9% year over year and by 7.0% quarter over quarter. The third-largest gold producer for the period recently completed a $60 million expansion of the mill at its Verninskoye gold mine in Russia, which is expected to increase annual output by 40,000 ounces.