October 25, 2018 / 11:43 AM / 23 days ago

Newmont profit dips alongside gold, copper prices

TORONTO (Reuters) - Colorado-based Newmont Mining Corp (NEM.N) reported lower third-quarter profit and revenue on Thursday, as a drop in bullion and copper prices hurt the gold miner’s results.

Newmont had been jockeying for the title of world’s largest gold producer this year, until Barrick Gold (ABX.TO) announced its $6.1 billion deal to buy Randgold Resources (RRS.L) in September.

Newmont would rather focus on improving margins for existing production than pursuing mergers and acquisitions for growth, Chief Executive Gary Goldberg said last month at an annual gold industry gathering in Denver.

In the quarter ended Sept. 30, Newmont earned adjusted profit of $175 million, or 33 cents per share, compared with $184 million, or 34 cents a share, a year earlier.

That beat the 19 cent per share adjusted profit that analysts, on average, had expected, according to Refinitiv data.

“Newmont delivered $636 million in adjusted EBITDA 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,” Goldberg said in a statement.

On a net basis, Newmont reported a loss of $161 million, or 31 cents a share, compared to a year-earlier profit of $213 million, or 39 cents a share.

The loss includes impairment charges of $366 million. A $331 million charge reflected Newmont’s decision to not advance certain exploration projects, while a $35 million charge stems from a new mine plan at its Emigrant open pit operation in Nevada, which shortened its mine life.

The miner narrowed its 2018 gold production forecast to between 4.9 million and 5.2 million ounces, from 4.9-5.4 million previously.

It improved its production cost estimate to between $950 and $990 per ounce on an all-in sustaining basis, a closely watched industry benchmark meant to more fully capture costs, from $965 to $1,025 an ounce.

Newmont reaffirmed its full-year forecasts for total and sustaining capital and copper production.

Gold production declined 4 percent to 1.29 million ounces in the quarter, while the average realized gold price dropped by $75 to $1,201 per ounce. The average realized copper price fell to $2.50 a pound from $3.06 in the same period last year.

The all-in production cost per ounce of gold fell 1 percent to $927 in the quarter.

Revenue fell 8 percent to $1.72 billion from the year-earlier quarter, lagging an expected $1.79 billion.

Reporting by Susan Taylor; Editing by Bernadette Baum

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