(Adds CEO comment, details on African, Indonesian operations)
April 24 Newmont Mining Corp, which
sources have said is in talks with Barrick Gold Corp on
a merger, reported a steep drop in first-quarter earnings on
Thursday as a result of lower gold and copper prices.
Newmont, the world's second-biggest gold producer after
Barrick, managed to lower its gold production costs and slightly
lift its gold output in the quarter, including a 40 percent
increase in production at its Tanami mine in Australia.
"We are confident we can maintain this trajectory as the
year progresses, as evidenced by our updated outlook for lower
costs and higher production for Africa," Gary Goldberg,
Newmont's president and chief executive said in a statement.
Newmont raised its production forecast for its African
operations to between 790,000 and 870,000 ounces from 785,000 to
850,000 ounces as a result of "mine plan optimization" at its
Ahafo operation in Ghana. It also lowered it cost outlook for
its African operations.
The company, which also has mines in North and South
America, and Asia, produced 1.21 million ounces of gold in the
first quarter, up slightly from 1.17 million ounces in the same
period in 2013. It produced 24,000 tonnes of copper against
20,000 tonnes a year ago.
All-in sustaining costs for gold were $1,034 an ounce in the
quarter, down from $1,121 per ounce in the same quarter a year
ago. Realized gold prices fell to $1,293 an ounce in the quarter
from $1,631 per ounce in the first quarter of 2013.
Newmont maintained its production forecast for the year of
between 4.6 million and 4.9 million ounces of gold. It also
expects to produce between 160,000 and 175,000 tonnes of copper
The company warned that continued delays in getting
approvals for exports in Indonesia will force it to scale back
production there and could mean it will not achieve its forecast
output for 2014.
Exports from Newmont's Batu Hijua copper-gold mine in
Indonesia have been halted since January when the Asian country
slapped a new tax on exports in an attempt to force miners to
process their raw minerals domestically.
Newmont said net income from continuing operations fell to
$117 million, or 23 cents per basic share, in the quarter, from
$314 million, or 63 cents per share, in the same period a year
On an adjusted basis, Newmont reported a profit of 22 cents
per share. Analysts expected Newmont to reported adjusted
earnings of 19 cents a share, according to Thomson Reuters
Denver, Colorado-based Newmont and Toronto-based Barrick
recently broadly agreed to a transaction under which Barrick
would acquire Newmont in an all-stock deal.
Talks between the two sides, however, hit a snag and broke
down last week, sources close to the situation have said. Some
talks between representatives of both companies have taken place
since but high-level talks between executives from both sides
have yet to resume.
(Reporting by Nicole Mordant in Vancouver; Editing by Steve
Orlofsky, Lisa Shumaker and Andre Grenon)