VANCOUVER (miningweekly.com) – US gold miner Newmont Mining has reported market-beating earnings for the three months ended December 31, and reported production that is on par with that of leading gold producer Barrick Gold.
The Denver, Colorado-based miner reported headline earnings for the fourth quarter of $216-million, or $0.40 a share, which was higher than average Wall Street analyst forecasts calling for earnings of $0.38 a share, on expected revenues of $1.91-billion. The performance was a 60% improvement on the adjusted earnings of $133-million, or $0.25 a share, in the fourth quarter of 2016.
Its net loss, however, came in at $534-million, or $0.99 a share, compared with a loss of $391-million, or $0.73 a share, in the comparable period a year earlier. Newmont attributed the wider net loss to the impact of noncash charges of $346-million related to the remeasurement of US deferred tax assets and liabilities and $395-million related to tax restructuring, following the enactment of the Tax Cuts and Jobs Act.
Revenue in the three-month period rose 8% year-on-year to $1.94-billion, on increased sales volumes and higher average realised gold prices.
Newmont's attributable gold output rose 1% in the quarter to 1.34-million ounces on account of higher throughput and grades at Merian, in Suriname, and Tanami, in Australia, and a full quarter of production at Long Canyon, in Nevada, which offset lower grade and recovery at the Cripple Creek and Victor mine, in Colorado, harder ore at Akyem, in Ghana, and lower grade at Boddington, in Australia.
The average realised price for gold was 6% higher for the quarter at $1 270/oz, compared with the prior year. The average realised price for copper was 29% higher for the quarter at $3.20/lb.
Gold cost applicable to sales (CAS) rose 2% to $693/oz for the quarter on higher mill maintenance costs at Boddington. All-in sustaining costs (AISC) rose 5% to $968/oz for the quarter on higher unit CAS, increased sustaining capital and higher advanced projects and exploration costs.
Attributable copper output was 15% lower year-on-year at 11 000 t for the fourth quarter, as mining focused on gold-bearing zones at the Phoenix mine, in Arizona. Copper CAS was 27% lower at $44-million for the quarter. Copper CAS improved 14% to $1.62/lb for the quarter, driving AISC down 10% to $2.08/lb of copper for the quarter on improved unit CAS.
Newmont guided for full-year 2018 and 2019 gold production of between 4.9-million and 5.4-million ounces of gold, building on the 5.3-million gold ounces produced in 2017, and it expects output to grow to between 4.6-million and 5.1-million ounces a year through to 2022. This contrasted against Barrick Gold, which had slashed its 2018 forecast production to between 4.5-million and 5-million ounces of gold, while targeting 4.2-million to 4.6-million ounces of yearly output from 2019 to 2022.
Newmont said low-cost production from newer mines, coupled with productivity gains, helped drive an 88% gain in full-year free cash flow to $1.48-billion. Newmont ended the fourth quarter with $3.3-billion cash on hand, and $800-million in debt on its books.
The miner lifted its 2018 capital budget to $1.2-billion to $1.3-billion, up from a December forecast of $900-million to $1-billion. The company also said it plans to spend about $230-million on exploration in 2018, with the budget spread 39% across North America, 20% for Australia and the rest for South America, Africa and other locations.
Earlier this week, Newmont adjusted its dividend policy with a quarterly pay-out of $0.14 a share, replacing its previous gold-price linked plan.
On Wednesday, the company reported gold reserves of 68.5-million ounces for 2017, flat on 2016, while resources rose 1% to 48.2-million ounces.
"This performance gave us the means to invest in five new projects, raise our dividend by 87% and increase our investment in exploration – an investment that paid off as we added 6.4-million ounces of gold to our reserve base, offsetting depletion for the first time in five years," president and CEO Gary Goldberg said in a statement.
The NYSE-listed stock traded in negative territory on Thursday, losing up to 1.52% a share at $37.58 apiece.