World number-one bullion miner Newmont CEO Tom Palmer has lifted the lid on his expectations for 2023, telling investors that the company is incorporating elevated costs and a lower gold price into its forecast for next year.

He said at an mining conference in Toronto this week that the unprecedented levels of global inflation had increased the all-in sustaining costs (AISC) for the gold industry by more than $200/oz from pre-pandemic levels.

At the same time, the gold price is under pressure as governments work to slow the inflationary effects from aggressive monetary policy decisions made during the pandemic. The consensus gold price for next year is $1 700/oz – a decline of about $100/oz compared with the average of the last year or so.

Combined, the gold industry has seen margins of nearly $800/oz compress by 40% to about $500/oz, stated Palmer.

“The macro-economic environment remains very volatile, and we will be closely monitoring it through to our guidance release in February,” he said.

Newmont’s official guidance release is schedule for February 23, but Palmer has indicated what the group’s expectations for 2023 are. He said that production and costs would be similar to that of 2022 and also affirmed the company’s guidance ranges for this year.

Newmont is aiming for six-million ounces of gold and 1.3-million tonnes of copper in 2022, at a cost of sales of $900/oz and an AISC of $1 150/oz.

The group in July increased its cost guidance to reflect the impact of the “highest global inflation rates in 40 years”.

Palmer said that Newmont had made deliberate efforts over the last few years to build the industry’s strongest balance sheet, growing its cash balances to $3.7-billion with total liquidity of $6.7-billion and no debt due until 2029.

“This robust platform will allow Newmont to enter the current phase of commodity cycle in a uniquely strong financial position, enabling us to be resilient and agile in times of market instability.”

He also stated that Newmont would continue to reinvest in its business with an average investment of about $2.5-billion a year forecast over the long term.