(Reuters) -Newmont, the world’s largest gold producer, missed Wall Street expectations for third-quarter profit on Wednesday as higher costs and lower production in Nevada took the shine off a rise in overall production.
The company’s shares fell 6.8% after the bell.
Newmont said costs rose due to planned maintenance at the Lihir project in Papua New Guinea – which it acquired following a $17 billion takeover of Newcrest – and higher spending on contract services across its portfolio.
Total gold costs, an industry measure that reflects total spending, rose to $1,611 per ounce in the July-September quarter, up from $1,426 per ounce a year ago.
The Denver, Colorado-based company’s attributable production from Nevada gold mines fell 19.3% to 242,000 ounces in the third quarter, compared to the prior year quarter.
Newmont owns a non-operating minority stake in Nevada Gold Mines, along with rival Barrick Gold, whose third-quarter production fell short of Wall Street expectations earlier this month due to lower production at Nevada mines.
However, the company’s total gold production rose 29.2% to 1.67 million ounces, mainly due to higher production at the Cerro Negro mine in Argentina, where production had previously suffered due to the deaths of two workers .
The market had estimated that the miner would produce approximately 1.64 million ounces of gold in the reported period.
Newmont also said it expects to produce 1.8 million gold ounces in the fourth quarter, its highest output of the year, and remained on track to meet its target of receiving $2 billion from divestiture proceedings.
The company posted adjusted earnings of 81 cents per share, compared with analyst expectations of 86 cents per share, according to data compiled by LSEG.
(Reporting by Vallari Srivastava and Sourasis Bose in Bengaluru; Editing by Alan Barona)
