Newmont shares tumble after 'sizeable miss' to Q3 forecasts
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More news: Newmont was the worst performing ASX 200 company in morning trade after the gold mining giant's third-quarter earnings fell short of consensus forecasts.
Newmont shares sank 7.9% to $80.49 by 11:40pm AEDT, following a 6.6% fall in after-hours trading on Wall Street.
RBC Capital Markets’ analysts Josh Wolfson and Alex Barkley called the result a "sizeable miss".
Production of 1.67 million ounces was largely in line with expectations, but Newmont's all-in sustaining cost of US$1,611 ($2,427) per ounce was a "significant and unexpected miss", according to the analysts, and 11% higher than consensus estimates.
Sharply higher costs were reported at Newmont's Cerro Negro, Lihir and Merian projects, while Newmont provided limited information on the cost variance, Wolfson and Barkley said.
Earnings per share of 82 US cents was below expectations of 85 cents and EBITDA of US$1.9 billion was behind consensus estimates of US$2.3 billion.
Newmont boosts Q3 output, forecasts Q4 growth
The news: The world's biggest gold miner Newmont reported a 4% increase in gold output during the September quarter and said it expects production over the next three months to be the "highest of the year".
The numbers: Newmont gold production grew 4% quarter on quarter to 1.7 million ounces, driven by higher production at its Cerro Negro project following a full quarter of resumed operations since its closure in the second quarter.
Newmont saw an average realised gold price of USD2,518 ($3,797), an increase of USD171 per ounce over the prior quarter. All-in sustaining cost (AISC) lifted 3% to USD1,611 per ounce primarily due to higher direct costs at its Lihir mine as a result of planned autoclave maintenance.
Adjusted EBITDA remained in line with the prior quarter at USD2 billion, while net income increased by USD69 million to USD922 million due to higher gold prices and higher sales volumes.
However, Newmont's US-listed shares fell 4.8% to USD54.98 in after hours trading on the New York Stock Exchange after its Q3 earnings fell short of consensus forecasts.
The context: Newmont said it is on track to meet its full-year production guidance of 1.8 million gold ounces at an AISC of USD1.475 per ounce.
The company noted that it also made "meaningful progress" on its non-core divestment program during the quarter, with the sale of its Akyem mine in Ghana, and divestments of interests in its Telfer and Havieron projects in Western Australia expected to deliver up to USD1.5 billion in combined gross proceeds.
The source: ASX announcement
