Newmont swings to Q3 loss on impairment, prices
Newmont Mining, which has operations in Peru and Suriname, notched up a third quarter loss as an impairment charge and slumping metals prices offset lower costs.
Newmont posted a US$161mn loss in Q3 as sales fell 8% to US$1.73bn in the quarter, the Colorado-based company said in a statement. Newmont posted a US$213mn profit a year earlier on US$1.9bn in sales.
All-in sustaining costs (AISC) ran at US$927/oz gold and US$1.87/lb copper in the quarter, compared with US$943/oz and US$1.65/lb a year ago, respectively. The company improved 2018 AISC guidance to US$950-990/oz gold from earlier estimates of US$965-1,025/oz. Copper AISC remained unchanged at US$2-2.20/lb.
Attributable gold output slid 1% to 1.9Moz in Q3, while copper production was little changed at 12,000t. Its South American operations - including Yanacocha and Merian - produced 178,000oz of attributable gold, up from 169,000oz a year earlier.
Newmont said it sold 1.27Moz gold at US$1,201/oz and 12,000t copper at US$2.50/lb compared to 1.31Moz gold at US$1,276/oz and 12,000t copper at US$3.06/lb a year earlier. The company added it allocated US$274mn to capex in the quarter.
Newmont lowered 2018 gold production guidance to 4.9-5.2Moz from 4.9-5.4Moz gold with 615,000-675,000Moz in attributable output expected from its South American operations. Yanacocha (pictured), a JV with Buenaventura in Peru, is expected to produce a total 470,000-545,000oz and its Merian mine in Suriname should produce 485,000-540,000oz. Copper guidance was unchanged at 40,000-60,000t.
Projects
Newmont, which also has operations in the US, Australia and Africa, plans US$1.2-1.3bn in capex this year, including US$170-230mn in South America, mostly on the US$250-300mn Quecher Main project at Yanacocha.
Quecher Main, which will add 200,000oz gold in output, is now scheduled to begin production at the end of the year and reach commercial production in 2H19, COO Tom Palmer said on a conference call to discuss financial results. The company is also registering "promising" drilling results at Yanacocha's sulfides project, where a feasibility study is to be completed by mid-2019, he said.
The company also started commissioning a new primary crusher last month at Merian to process harder rock and brought in four new haul trucks, according to Palmer.
Newmont, which in Q3 expanded its project portfolio to include Colombia and Mexico by investing in Latin America-based mining firms Evrim Resources, Orosur Mining and Miranda Gold, added it promoted COO Palmer to president and COO starting November 1. Palmer, a 25-year mining veteran, previously served at Rio Tinto.
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