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Newmont Misses Street Views on Higher Costs

Newmont Gold Corp. (NYSE: NEM – $37.62) missed Wall Street estimates for quarterly profit due to higher costs and the world’s biggest gold miner cut its annual output target as production remained suspended at one of its largest mines in Mexico. Adjusted net income rose to $292 million, or $0.36 per share for the third quarter from $175 million or $0.33/share a year earlier. Analysts were expecting a profit of $0.39. The company said it expects attributable production for the year to be 6.3 million ounces, down from a prior forecast of 6.5 million ounces. The gold miner had said in October a blockade that had restricted production and exports of lead and zinc concentrates from its Penasquito mine in Mexico has been lifted, though operations remained suspended. The blockade hit Penasquito’s third-quarter production by some 11,000 gold ounces, 1.7 million silver ounces, 13.7 million pounds of lead and 22.8 million pounds of zinc. Newmont is in the process of integrating new operations after it finalized its acquisition of Goldcorp and its Nevada joint venture with Barrick Gold in the second quarter. All-in sustaining costs, an industry metric that reflects total costs associated with production, rose 10% to $987 per ounce in the quarter due to a ramp up to boost gold reserves. A five percent allocation of NEM can be maintained for diversification.

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