Newmont Reports 4Q Prelim Output - Analyst Blog

By Zacks | January 24, 2013 AAA

Newmont Mining Corporation (NEM) has announced preliminary gold and copper production for the fourth quarter and full-year 2012. The company also provided its outlook for 2013.

The company's attributable gold and copper production for the fourth quarter amounted to 1.3 million ounces and 35 million pounds, respectively. Attributable copper and gold sales were 1.2 million ounces and 42 million pounds, respectively, in the quarter. Average realized gold and copper price for the quarter was $1,700 per ounce and $3.22 per pound, respectively. The company's expenditure for the upcoming projects remained well within its guidance.

For the full year, attributable gold production was 5 million ounces and copper production was 143 million pounds. Sales of gold and copper for the year were 4.9 million ounces and 145 million pounds, respectively.

Newmont's board of directors also hiked the gold price linked dividend by 21% year over year to 42.5 cents per share for the first quarter of 2013.

The company also gave its outlook for 2013 and anticipates attributable gold and copper production to be approximately 4.8 to 5.1 million ounces and 150 million to 170 million pounds, respectively. The cost applicable to sales is anticipated to be in the range of approximately $675 to $750 per ounce of gold and $2.25 to $2.50 per pound of copper.

Newmont forecasts capital expenditures to be in the band of $2.1 billion to $2.3 billion in 2013. The company expects capital expenditure to decrease 20% from 2012.

The company aims to advance its pipeline projects that are expected to be profitable. These include the completion of construction at Akyem and start of production in late 2013, and advancement of the stripping campaign at Batu Hijau to prepare for Phase 6 mining.

Newmont's focus also lies in increasing its profitability and ensuring strong cash flow generation. Thus, it intends to focus on mining fundamentals - from technical competency to safety and social responsibility.

Newmont currently carries a Zacks Rank #3 (Hold).

Other companies belonging to the gold mining industry with favorable Zacks Rank are AngloGold Ashanti Ltd. (AU), DRDGold Ltd. (DRD) and Franco-Nevada Corporation (FNV), with all holding a Zacks Rank #1 (Strong Buy).

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