Newmont CEO Gary Goldberg
Colorado-based Newmont Gold on Thursday reported weaker adjusted net income of $175-million, as its revenue decreased along with gold prices and lower production at various sites.
The third-quarter income adjusted for impairments and a write-down in North America, came to $0.33 a diluted share, which is lower than the prior-year quarter’s $0.34 a share, but better than analyst estimates of $0.20 a share.
The company’s net loss amounted to $161-million in the quarter, a decrease of $374-million from the prior-year quarter, and was mainly owing to the impairment of exploration and long-lived assets in North America and lower metal prices, partially offset by lower income tax expense.
“Newmont delivered $636-million in adjusted earnings before interest, tax, depreciation and amortisation and $154-million in free cash flow in the third quarter on the back of ongoing productivity improvements across the portfolio and higher grades in Africa and South America,” commented president and CEO Gary Goldberg.
Revenue decreased by 8% to $1.73-billion in the quarter, as Newmont reported a $75/oz reduction in its average realised gold price at $1 201/oz. The average realised price for copper was $2.50/lb, a reduction of $0.56 over the prior-year quarter.
Attributable production fell by 4% to 1.29-million ounces at an all-in sustaining cost (AISC) of $927/oz, mainly as a result of lower mill throughput at Carlin, in Nevada, lower leach production at Cripple Creek & Victor (CC&V), in Colorado, and lower grades at Kalgoorlie operations, in Australia.
Attributable copper production from Phoenix, in Nevada, and Boddington, in Western Australia, was 12 000 t for the quarter – in line with the prior-year period. Copper AISC increased by 13% to $1.87/lb, mainly owing to higher cost applicable to sales (CAS).
Newmont provided a new production guidance for 2018, narrowing its forecast to between 4.9-million ounces and 5.2-million ounces, after reducing its North American unit’s guidance to between 1.9-million ounces and 2.1-million ounces, citing lower output at Carlin’s surface mines.
South America’s production remains between 615 000 oz and 675 000 oz, Australia’s between 1.4-million ounces and 1.6-million ounces and Africa’s output between 815 000 oz and 875 000 oz.
The group narrowed its gold AISC guidance to between $950/oz and $990/oz and kept the gold CAS forecast unchanged at between$700/oz and $750/oz.
Attributable copper forecast is unchanged at 40 000 to 60 000 t at a CAS of between $1.65/lb and $1.85/lb and an AISC of between $2/lb and $2.20/lb.
The company ended the third quarter with $3.1-billion cash on hand and net debt of $1.1-billion.
Its dividend for the third quarter was increased by 87% over the prior-year quarter to $0.14 a share.