Newmont's earnings fall on weak gold price
Newmont's earnings fall on weak gold price
DENVER (Reuters): Newmont Mining Corp., North America's biggest gold mining company, said on Wednesday its fourth-quarter earnings fell as a stagnant gold price and rising energy costs hit the company hard.
Newmont, which has operations in the United States, Mexico, Peru, Russia and Indonesia, reported earnings of $19.7 million, or 12 cents a share, on revenues of $476.8 million.
In the year-earlier quarter it reported a profit of $46.8 million, or 28 cents a share, on revenues of $430.5 million.
Excluding a $21.3-million asset write-off and other unusual or non-cash items related to the Mesquite mine in California and a Mexican joint venture exploration project, fourth-quarter operating earnings were 21 cents per share.
The Wall Street consensus forecast for operating earnings was 19 cents a share, according to First Call/Thomson Financial.
Newmont said total gold production for the fourth quarter rose 31 percent to a record 1.6 million equity ounces, giving the company a record gold production level of 4.94 million ounces of gold for the year.
The company's realized gold price fell $21 an ounce during the quarter to $274 an ounce, while total cash costs declined $1 to $163 an ounce.
By the close, spot gold, which trades in a 52-week range of $252.80 and $326.25 an ounce, ended in London at $262.90/$263.50, from Tuesday's New York close at $263.45/$263.95.
Newmont, like many of its gold mining rivals, said it was cutting the average gold price it uses to calculate proven and probable reserves to $300 an ounce from $325.
Newmont's move to a lower average gold price follows similar moves by rival gold miners Placer Dome Inc. and Barrick Gold Corp., which both reduced their long-term gold assumption to $300 an ounce from $325 in recent weeks.
The gold miner said earnings and cash flow in 2001 will be affected by several factors, including lower combined production and higher cash costs.
Overall it expects North American production to decline by approximately 400,000 ounces with the depletion of the surface mining at a mine in Nevada and further production reductions at its Mesquite mine in California.