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Newmont Mining Posts Stronger-than-Expected Results

NEM The biggest U.S. – based gold and copper miner, Newmont Mining Corp. (NYSE: NEM – $19.83), reported lower earnings, but the results were better than the market expected on the back of higher gold production and lower cost. Newmont also improved its cost outlook for the year and announced it would expand its Tanami gold mine in Australia. The world’s oldest gold miner said its adjusted net income from continuing operations was $126 million, or $0.23 a share ahead of analysts’ expectations of $0.17 and compared to $0.50 a year ago. Revenue rose 16% to $2.03 billion and higher than most views of $1.93 billion. Free cash flow from continuing operations of $478 million compares to only $51 million in the prior year period. For the quarter, Newmont said the average realized gold and copper price fell to $1,104 a troy ounce and $1.95 a pound, respectively, compared with $1,270 an ounce and $2.71 a pound a year earlier. Gold production, meanwhile, rose 16% to 1.34 million ounces, while copper production reached 48,000 metric tons, compared with 13,000 metric tons a year earlier.  Newmont lowered its forecast for all-in sustaining costs this year to between $800 and $940 an ounce and left its 2015 gold production forecast of 4.7 million ounces to 5.1 million ounces unchanged. Management has initiated a vigorous cost-saving plan which, with the ramp-up of a new mine in Africa and a recovery in Nevada, plus the added low-cost production from the newly acquired Cripple Creek and Victor gold mine should help stabilize overall performance. The share price of beleaguered Newmont Mining has been inching back since the lows set back in August, but appreciation potential currently envisioned is best left to patient, aggressive investors willing to accept a small allocation in a gold-related mining stock.

NEM

 

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