Gold mining giant
Newmont Mining Corporation
) first-quarter 2013 adjusted earnings of 71 cents a share were
down 38.3% from last year's earnings of $1.15, missing the Zacks
Consensus Estimate of 78 cents.
On a reported basis, the company posted a profit from
continuing operation of $315 million or 63 cents per share in the
quarter, down 44% from $561 million or $1.11 per share a year
ago. The bottom line was hit by lower grade and recovery at
Carlin, lower grade at Twin Creeks in Nevada and reduced
concentrate sales due to shipping delays.
Newmont's revenues fell nearly 18.9% year over year to $2,177
million in the quarter, missing the Zacks Consensus Estimate of
$2,319 million. Sales were affected by shipping delays.
Newmont's attributable gold and copper production was 1.165
million ounces and 38 million pounds in the quarter, down 11% and
up 9%, respectively, from the prior-year quarter. Attributable
gold and copper sales were 1.142 million ounces and 31 million
pounds in the quarter, down 11% and 16%, respectively, from the
Gold and copper cost applicable to sales (CAS) was $758 per
ounce and $2.19 per pound, up 22% and 11% year over year,
respectively. All-in sustaining cost was $92 million, down 7%
from the previous year quarter.
Gold production at the Nevada mine declined 12% year over year
to 381,000 ounces in the reported quarter, due to lower grade and
recovery at Mill 5 and Mill 6 and lower grade at the Twin Creeks
autoclave, partially offset by new production at Emigrant and
higher throughput at Phoenix. Production at La Herradura
increased 2% year over year to 55,000 ounces, due to higher leach
placement and grade.
Gold production at Yanacocha in Peru plunged 22% year over
year to 147, 000 ounces on account of lower mill grade and lower
leach ore placement from Chaquicocha. Gold production at La Zanja
was roughly15, 000 ounces.
Gold and copper production at the Boddington mine in Australia
increased 9% and 29% year over year, respectively, to 177,000
ounces and 18 million pounds, respectively, in the reported
quarter, based on higher mill grade.
Other Australia/New Zealand
Gold production at the mines in Other Australia/New Zealand
zone decreased 4% year over year to 258,000 ounces in the
reported quarter, due to lower mill grade at Jundee, Kalgoorlie
and Tanami coupled with lower throughput at Tanami,, partly
offset by higher throughput at Waihi.
At the Batu Hijau mine in Indonesia, both gold and copper
production decreased 36% and 5% year over year, respectively, to
7,000 ounces and 20 million pounds, respectively, in the reported
quarter on account of lower grade and recovery resulting from the
processing of lower grade stockpiled material.
Attributable gold production at Newmont's Ahafo mine in Ghana
plummeted 29% from last year to 125,000 ounces as a result of an
increase of in-process inventory and lower milled grade, partly
offset by higher recovery.
Newmont had cash and cash equivalents of $1,378 million as of Mar
31, 2013, versus $2,612 million as of Mar 31, 2012. The company's
long-term debt increased roughly 4.9% year over year to $6,379
million. Consolidated spending was down 13% year over year (or by
$217 million) in the reported quarter.
Newmont's second quarter dividend payable of 35 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, which is among the prominent players in the
gold-mining industry along with
Barrick Gold Corporation
Kinross Gold Corporation
), expects gold production to be roughly 4.8 million to 5.1
million in 2013.
Copper production is anticipated to be in the range of 150
million to 170 million pounds. In the second half of the year,
planned production is anticipated to increase owing to greater
mill throughput in Nevada and start up of the first production
line at the Akyem mine in Ghana. Newmont also expects to ramp up
Phase 6 ore mining at Batu Hijau in Indonesia late next year to
improve free cash flow in 2014 and 2015.
BARRICK GOLD CP (ABX): Free Stock Analysis
GOLDCORP INC (GG): Free Stock Analysis Report
KINROSS GOLD (KGC): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
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Newmont has reduced its planned 2013 attributable and
consolidated capital expenditure guidance by $100 million to $2 -
$2.2 billion and to $2.3 - $2.5 billion, respectively. All-in
sustaining cost is expected to be between $1,100 and $1,200 per
ounce on both a consolidated and attributable basis for 2013.
Newmont expects 2013 attributable gold production in Nevada to be
in the range of roughly 1.7 million to 1.8 million ounces at CAS
of around $600 to $650 per ounce. The company expects 2013
attributable gold production at La Herradura, North America to be
in the range of 225,000 and 275,000 ounces at CAS of around $650
and $700 per ounce.
Newmont forecasts 2013 attributable gold production at Yanacocha
to be in the range of 475,000 and 525,000 ounces at CAS of around
$600 and $650 per ounce. The company projected 2013 attributable
gold production at La Zanja in the range of 40,000 and 50,000
Newmont expects 2013 attributable gold production at Boddington
to be in the range of 700,000 and 750,000 ounces at CAS of around
$850 and $950 per ounce. Attributable copper production is
expected to be within 70 million and 80 million pounds at CAS of
between $2.45 and $2.65 per pound.
Newmont forecasts 2013 attributable gold production at Other
Australia/New Zealand mines to be in the range of 925,000 and
975,000 ounces at CAS of around $950 and $1,050 per ounce.
Newmont expects 2013 attributable gold production at Batu Hijau
mine to be in the range of 20,000 and 30,000 ounces at CAS of
around $900 and $1,000 per ounce. The company forecasts 2013
attributable gold production at Ahafo mine in to be in the range
of roughly 525,000 and 575,000 ounces at CAS of around $550 and
$600 per ounce.
Newmont currently carry a short-term Zacks Rank #3 (Hold).