Newmont Posts Lower Profits; Raises Dividend

Newmont Mining Corp. (NYSE: NEM – $35.46) said net income came in at $206 million, equal to an adjusted $0.35 per share in the third quarter, compared with adjusted earnings per share of $0.38 a year earlier and two cents better than Street estimates. Revenue rose five percent to $1.9 billion for the period as increased sales volumes offset a lower average realized gold price of $1,276 per ounce compared to $1,329 in the prior year quarter. The average realized price for copper improved by $1.02 to $3.06 per pound. Attributable gold production increased 7% to 1.3 million ounces for the quarter as new production at Merian and Long Canyon was partly offset by lower throughput at Twin Creeks and lower grades at Boddington. Copper production from Phoenix and Boddington was 12,000 tonnes compared to 15,000 in the prior year quarter.

       Newmont reduced net debt to $1.1 billion, ending the quarter with $3.0 billion cash on hand, and an industry-leading investment-grade credit profile. The company also declared a third quarter dividend, which increased 50% from the prior year quarter to $0.075 per share. Newmont’s outlook reflects steady gold production and ongoing investment in its current assets and strong growth prospects. I will continue to hold a 5% allocation in the shares of NEM for now as a portfolio diversification measure.

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