Resource News
Newmont Profit Jumps on Higher Gold Price, Production (Update4)
By resourceINTEL · February 26, 2010 · 12:16 am · Leave a Comment
Feb. 25 (Bloomberg) — Newmont Mining Corp., the largest U.S. gold producer, reported fourth-quarter profit that topped analysts’ estimates after output increased and bullion prices rose to a record.
Net income climbed to $558 million, or $1.13 a share, from $4 million, or 1 cent, a year earlier, Greenwood Village, Colorado-based Newmont said today in a statement. Sales rose 90 percent to $2.52 billion. Profit excluding some items was $1.14 a share. The average estimate of 12 analysts surveyed by Bloomberg was for profit of 86 cents.
Chief Executive Officer Richard O’Brien is boosting output at Newmont’s Boddington mine in Australia to benefit from gold prices that reached a record $1,227.50 an ounce in December. Newmont’s average realized gold price was $1,102 an ounce in the period on sales of 1.5 million ounces. The average price was $799 in the same period a year earlier.
“Where growth is going to show through their own efforts in the near-term is principally better performance out of Australia,” Adam Graf, a New York-based analyst with Dahlman Rose & Co., said in a telephone interview before the results were released. “I expect higher production this year and lower costs in Australia to again be followed for the next year or two as Boddington continues to improve.”
Newmont will make acquisitions “at some point” to increase gold production and reserves, O’Brien said on a conference call with analysts and investors.
Shares Rise
Newmont rose $1.54, or 3.3 percent, to $48.02 at 11:33 a.m. in New York Stock Exchange composite trading. The shares gained 16 percent in the year ended yesterday.
Newmont completed its acquisition of the one-third stake in the Boddington project it didn’t already own from AngloGold Ashanti Ltd. in June and started production there in September. Boddington will be Australia’s largest gold mine once it reaches full annual capacity of 1 million ounces.
“We’re looking to enhance our grade; we’re looking to expand our average mine life,” Randy Engel, Newmont’s executive vice president of strategic development, said on today’s call. “We’re looking to do that in more favorable jurisdictions, but we are willing to go into places we haven’t gone before and we’re looking for synergies.”
The company sold 5.3 million ounces of gold in 2009, exceeding its forecast of about 5.2 million ounces, and said today sales this year will be 5.3 million to 5.5 million ounces.
Higher Boddington output will offset lower production at Newmont’s Carlin operations in Nevada, where the company plans to defer some production scheduled for this year and 2011 into the following two years, Newmont said…read more at the Bloomberg
