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Newmont expects lower Q4 gold/copper production
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23rd January 2013
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TORONTO ( – The world’s No 2 gold producer Newmont Mining expects its attributable fourth-quarter gold and copper production to be lower than that of the previous year, saying it would this year again focus on mining fundamentals to achieve profitable production growth.

The New York-listed company expected gold production for the fourth quarter, which ended on December 31, to be 4% lower year-on-year at 1.25-million ounces, compared with the 1.3-million ounces the company produced in the comparable period of 2011.

For the full year, the company expected to have produced 4.97-million ounces of gold, also a 4% decline when compared with the 5.18-million ounces the company produced a year earlier.

The mining major said it expected to record a sharp 26% decline in copper production during the fourth quarter to 35-million pounds, compared with the 47-million pounds it produced in the same period a year earlier. For the full year, the company’s total copper production declined by 31% year-on-year to 143-million pounds, compared with the 206-million pounds the company produced in 2011.

Newmont said it had sold 8% less gold during the fourth quarter at 1.23-million ounces, compared with the 1.34-million ounces sold a year earlier. The average realised gold price during the quarter was $1 661/oz.

For the full year 2012 the company expected gold sales to total 4.87-million ounces, 4% down on 2011’s 5.08-million ounces sold at an average price of $1 700/oz.

Copper sales for the fourth quarter totalled 42-million pounds, 14% down on the same quarter in 2011, when it sold 49-million pounds. The average realised price was $3.43/lb of copper for the fourth quarter.

For the full year, the company sold 29% less copper at 145-million pounds, compared with the 203-million attributable pounds the company sold in 2011. The average realised price for a pound of the red metal in 2012 was $3.22.

It cost the company between $670/oz and 680/oz to produce gold during the fourth quarter, and for the full year, gold production cost between $700/oz and $715/oz.

It cost the company between $2.30/lb and $2.40/lb to produce copper during the quarter and between $2.60/lb and $2.70/lb for full-year production.

"In 2013, we will focus on mining fundamentals – from technical competency to safety and social responsibility – to lay the groundwork for profitable growth and more robust cash-flow generation,” president and COO Gary Goldberg, who would become president and CEO for Newmont Mining, and join its board on March 1, said.

He revealed that the company’s priorities included advancing projects that could deliver profitable production gains, including completing construction at Akyem, in Ghana, slated for production to start late in the year; and advancing the company’s stripping campaign at Batu Hijau, in Indonesia, to prepare for Phase 6 mining.

Newmont expected to produce between 4.8-million and 5.1-million attributable ounces of gold, and between 150-million and 170-million attributable pounds of copper during this year.

The company expected to produce gold at a cost of $675/oz to $750/oz of gold and $2.25/lb to $2.50/lb of copper this year. Newmont also expected its all-in sustaining costs of gold production to range between $1 100/oz and $1 200/oz.

Newmont had a capital budget of between $2.1-billion to $2.3-billion for the year.

The company said that subject to board approval, it would pay its first-quarter gold-price-linked dividend of $0.425 a share, which entails a 21% increase over the prior year quarter.

The company’s stock trading on the NYSE was down 0.70% at $45.26 apiece on Wednesday morning.

Edited by: Creamer Media Reporter


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Batu Hijau
Picture by: Reuters
Batu Hijau