Gold mining giant
Newmont Mining Corporation
) fourth-quarter 2013 adjusted earnings of 33 cents a share
dropped 70% from the year-ago quarter's earnings of $1.11 a share
and also missed the Zacks Consensus Estimate of 42 cents.
On a reported basis, the company posted net loss from
continuing operations of $1,174 million or $2.34 per share in the
quarter versus net earnings of $645 million or $1.30 per share a
year ago. The bottom line is impacted by asset impairment charges
as a direct result of changes in gold pricing.
Newmont's revenues fell nearly 12.4% year over year to $2,169
million in the quarter but beat the Zacks Consensus Estimate of
For full-year 2013, adjusted earnings were $1.40 per share, down
62% from $3.71 per share recorded in 2012. The results missed the
Zacks Consensus Estimate of $2.07 Reported net loss from
continuing operations totaled $2,523 million or $5.06 per share
versus an earning of $1,885 million or $3.78 per share in 2012.
For full-year 2013, revenues decreased roughly 16% to $8,322
million from $9,868 million in 2012 but surpassed the Zacks
Consensus Estimate of $8,242 million.
Newmont's attributable gold and copper production was 1,448
million ounces and 38 million pounds in the quarter, up 16% and
9% year on year, respectively. Attributable gold and copper
production was 5,065 million ounces and 144 million pounds in
2013, up 2% and 0.7% year on year, respectively.
Gold and copper cost applicable to sales (CAS) were $744 per
ounce and $4.02 per pound in the reported quarter up 4.8% and 54%
year over year, respectively. Gold and copper cost applicable to
sales (CAS) were $761 per ounce and $4.42 per pound in 2013, up
12.4% and 89% year over year, respectively.
All-in sustaining cost (AISC) was $1,032 per ounce in the
quarter, down 14% from the previous-year quarter. All-in
sustaining cost (AISC) was $1,104 per ounce in 2013, down 6% from
Gold production at the Nevada mine increased 12% year over year
to 535,000 ounces in the reported quarter due to higher tons and
grade at Mill 6, higher grade at the Juniper mill and higher
grades at Phoenix and also higher leach production at Carlin
North Area and Emigrant. Production at La Herradura decreased 54%
year over year to 22,000 ounces due to the suspension of the
explosives permit related to a land dispute which resulted in an
impairment to the value of ore on leach pads.
Gold production at Yanacocha in Peru slipped 21% year over year
to 95,000 ounces on account of planned lower gold production from
leach pads due to lower grades.
Gold and copper production at the Boddington mine in Australia
decreased 17% and 16% year over year to 179,000 ounces and 16
million pounds, respectively, in the reported quarter due to
lower ore grade and throughput, partly offset by higher recovery.
Other Australia/New Zealand
Gold production at the mines in Other Australia/New Zealand zone
increased 24% year over year to 304,000 ounces in the reported
quarter, due to higher ore grade and higher mill throughput.
At the Batu Hijau mine in Indonesia, gold production decreased
14% year over year to 6,000 ounces in the reported quarter on
account of lower ore grade for gold. Copper production of 22
million pounds increased 38% from the previous-year quarter due
to higher ore grade for copper and higher copper metal recovery.
Attributable gold production at Newmont's Ahafo mine in Ghana
went up 32% from last year to 162,000 ounces based on higher ore
grade and mill throughput. The Akyem project in Ghana started its
commercial production in Oct 2013 and its attributable gold
production for the reported quarter was 129,000 ounces.
Newmont had cash and cash equivalents of $1,555 million as of Dec
31, 2013, down 0.4% from $1,561 million as of Dec 31, 2012. The
company's long-term debt decreased roughly 2.3% year over year to
Newmont's gold production expectation for 2014 is 4.6-4.9 million
ounces and for 2015 and 2016 it is anticipated to be 4.8-5.2
million ounces. Copper production for 2014 is anticipated to be
in the range of 95-110 million pounds, and for 2015, it is
expected to be in the range of 145-160 million pounds. For 2016,
it is expected to be in the range of 125-140 million pounds.
Newmont continues to expect gold and copper CAS of between $740
and $790 per ounce and $2.00 and $2.25 per pound, respectively,
in 2014. Copper CAS is anticipated to improve as the Batu Hijau
mine plan progresses, reaching higher grade ore.
In 2014, Newmont will be investing roughly $1.3 to $1.4 billion
in consolidated capital expenditures allocating roughly 90% to
sustaining capital. Total capital expenditures are expected to
reduce by 25% in 2014 from 2013.
Newmont will be prioritizing projects that create value, lower
cost and extend mine life, such as the Turf Vent Shaft project in
Nevada that will strengthen its portfolio in 2014.The company
also has plans of revitalizing Tanami and Waihi mines.
Improving economic profiles for a number of organic growth
projects are underway. Decision on the development of the Merian
project in Suriname is expected in the second quarter of 2014.
The company will also be evaluating all its projects and
expenditures in order to protect its balance sheet and contribute
more to free cash flow.
Newmont currently carries a Zacks Rank #5 (Strong Sell).
FRANCO NV CP (FNV): Free Stock Analysis
GOLD FIELDS-ADR (GFI): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
PRETIUM RES INC (PVG): Free Stock Analysis
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Other companies in the gold mining industry worth considering are
Pretium Resources Inc.
Gold Fields Ltd.
). While Franco-Nevada carries a Zacks Rank #1 (Strong Buy),
Pretium Resources and Gold Fields hold a Zacks Rank #2 (Buy).