(Bloomberg) — Shares of Newmont Corp. fell after the market digested disappointing earnings results, suggesting the world’s largest gold producer is struggling to control costs at its mines and benefit from rising gold prices.
Most read from Bloomberg
Shares of Newmont fell as much as 4.9% in New York on Thursday, a day after reporting third-quarter results that missed analysts’ estimates on adjusted earnings, costs and revenue. Newmont fell short of expectations after spending more to unearth the precious metal from mines in Australia, Canada, Peru and Papua New Guinea.
Some of the higher costs came from large assets Newmont picked up through a takeover of Newcrest Mining Ltd last year. worth $15 billion. For example, the Denver-based company had 55% higher all-in maintenance costs at its Lihir facility in Papua New Guinea in the three-month period compared to the second quarter. Capital expenditure also rose 10% due to expansion projects in Australia and Argentina, Newmont said.
Newmont is the first major gold producer to report results in an earnings season when investors expected huge gains for precious metal producers. Gold is among the best performing commodities this year, up more than 30% and delivering a windfall for miners.
That rally helped Newmont post its highest quarterly profit in five years, allowing $922 million in net income for the quarter to be attributed to shareholders.
The company’s purchase of Newcrest last year helped cement its position as the world’s largest producer. Newmont produced 1.67 million ounces of gold in the quarter, easily outpacing its closest rival, Barrick Gold Corp., which produced 943,000 ounces, according to last week’s preliminary results.
(Updates shares from first paragraph, details on costs)
Most read from Bloomberg Businessweek
©2024 BloombergLP
