Gold mining giant
Newmont Mining Corporation
) third-quarter 2013 adjusted earnings of 46 cents a share
dropped 46.5% from the year-ago quarter's earnings of 86 cents,
but comfortably beat the Zacks Consensus Estimate of 32
On a reported basis, the company posted a profit from
continuing operation of $429 million or 86 cents per share in the
quarter, up 7% from $400 million or 81 cents per share a year
ago. The bottom line benefited from the sale of Newmont's
investment in Canadian Oil Sands Limited, and higher production
from Nevada and Other Australia/New Zealand operations.
Newmont's revenues fell nearly 20% year over year to $1,983
million in the quarter, missing the Zacks Consensus Estimate of
Newmont's attributable gold and copper production was 1.284
million ounces and 34 million pounds in the quarter, up 4% and
down 3% year on year, respectively. Attributable gold and copper
sales were 1.261 million ounces and 35 million pounds in the
quarter, up 4% and down 5%, respectively, from the year-ago
Gold and copper cost applicable to sales (CAS) was $649 per
ounce and $2.63 per pound, down 6% and up 11% year over year,
respectively. All-in sustaining cost (AISC) was $993 per ounce,
down 16% from the previous-year quarter.
Gold production at the Nevada mine increased 2.4% year over
year to 468,000 ounces in the reported quarter due to higher
leach production from Emigrant and Carlin North Area and higher
grade and throughput at Juniper Mill and Phoenix, partly offset
by lower grade and recovery at Mill 5 and lower throughput and
recovery at Mill 6 and the Twin Creeks Autoclave. Production at
La Herradura increased 2% year over year to 52,000 ounces due to
higher production from Noche Buena and Centauro, essentially
offset by lower production from Soledad and Dipolos.
Gold production at Yanacocha in Peru plunged 28% year over
year to 132,000 ounces on account of lower leach production as a
result of placing lower grade leach ore from Tapado Oeste, partly
offset by higher mill grade from Tapado Oeste.
Gold production at the Boddington mine in Australia increased
7% year over year to 178,000 ounces in the reported quarter due
to higher throughput and recovery, partly offset by lower ore
grade milled. Copper production from the mine decreased 6% year
over year to 15 million pounds on account of lower mill
Other Australia/New Zealand
Gold production at the mines in Other Australia/New Zealand
zone increased 26% year over year to 289,000 ounces in the
reported quarter, due to higher mill throughput and ore grade
from underground sources at Tanami, higher throughput at Waihi,
and higher grade and throughput at Kalgoorlie, partly offset by
lower grade at Jundee.
At the Batu Hijau mine in Indonesia, gold production decreased
44% year over year to 4,000 ounces in the reported quarter on
account of lower ore grade, lower recovery, and lower mill
throughput. Copper production of 19 million was at par with the
previous-year quarter due to higher copper mill recovery.
Attributable gold production at Newmont's Ahafo mine in Ghana
went up 10% from last year to 144,000 ounces based on higher mill
recovery, partly offset by lower grade. The Akyem project in
Ghana started its commercial production in October and maintained
2013 attributable gold production outlook between 50,000 and
Newmont had cash and cash equivalents of $1,475 million as of
Sep 30, 2013, down 4.7% from $1,549 million as of Sep 30, 2012.
The company's long-term debt decreased roughly 2.5% year over
year to $5,949 million.
Newmont's fourth quarter dividend of 20 cents per common share
is in accordance with the company's gold-price-linked dividend
policy based on the average London P.M. Gold Fix and it is
consistent with the prior-year quarter.
Newmont reiterated its gold production expectation for 2013 in
the range of 4.8 million-5.1 million ounces. Copper production
outlook has been lowered and is anticipated to be in the range of
135-145 million pounds from the previous outlook of 150
million-170 million pounds.
Newmont continues to expect gold and copper CAS between $675
and $750 per ounce and $2.25 and $2.50 per pound, respectively,
excluding the stockpile write-downs.
Newmont has reduced its planned 2013 attributable and
consolidated capital expenditure guidance by $200 million to
$1.7-$1.9 billion and to $2-$2.2 billion, respectively.
Attributable and consolidated sustaining capital outlook has been
reduced by $100 million to $1-$1.1 billion and to $1.2-$1.3
Newmont currently carries a Zacks Rank #3 (Hold).
Other companies in the gold mining industry worth considering
Pretium Resources Inc.
Allied Nevada Gold Corp.
). While Pretium Resources and Franco-Nevada carry a Zacks Rank
#1 (Strong Buy), Allied Nevada holds a Zacks Rank #2 (Buy).
ALLIED NEV GOLD (ANV): Free Stock Analysis
FRANCO NV CP (FNV): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
PRETIUM RES INC (PVG): Free Stock Analysis
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