Newmont Corp. is expecting more of the same for gold output during the next year as the world’s top bullion producer pursues its biggest acquisition ever to secure future growth.
(Bloomberg) — Newmont Corp. is expecting more of the same for gold output during the next year as the world’s top bullion producer pursues its biggest acquisition ever to secure future growth.
The Denver-based company expects to produce 5.7 million to 6.3 million ounces of gold this year, Newmont said Thursday while reporting fourth-quarter earnings that beat analysts’ expectations. That compares to last year’s production of 6 million ounces, and comes as the company seeks to add mines through a proposed $17 billion takeover of Australian rival Newcrest Mining Ltd.
The world’s biggest gold miners have struggled to boost production while facing higher input costs and harder-to-mine deposits, even with prices for the precious metal up about 37% in the last five years. Newmont itself faced mining woes that undercut production and delayed projects, including a stalled expansion of its Yanacocha mine in Peru.
Shares rose 0.6% to $44.49 at 9:47 a.m. in New York.
Newmont had cut its full-year guidance to 6 million ounces from 6.5 million ounces in October, citing difficulties at its mines in Boddington, Western Australia, and Nevada, as well as the continued impact from the pandemic in Canada and Australia. Chief Executive Officer Tom Palmer said in an earnings call at the time that production in 2023 is expected to increase about 5%, with costs likely in line with 2021 levels.
Production in 2022 beat the average estimate of 5.9 million ounces by analysts surveyed by Bloomberg. The company has seen its output stagnate since acquiring Canada’s Goldcorp in 2019. Its highest annual output was in 2004, when it produced 6.73 million ounces following its 2003 takeover of Australia’s Normandy Mining Ltd.
Newmont didn’t provide any update to its takeover plans for Newcrest in Thursday’s earnings statement. Newcrest rejected the initial $17 billion proposal on Feb. 15, with its interim CEO saying the Australian company was “worth a lot more.”
- Read more: Newcrest CEO Says Ball Is in Newmont’s Camp in Takeover Talks
Newmont said its adjusted earnings in the fourth quarter were 44 cents a share, topping the 42 cent average estimate from analysts surveyed by Bloomberg. The gold producer said inflationary pressures pushed its all-in sustaining costs to $1,211 an ounce for the year, worse than what analysts expected.
The company’s 2023 capital expenditure guidance of $2.2 billion to $2.6 billion is also “a bit higher” than expected, Vital Knowledge founder Adam Crisafulli said in a note.
(Adds shares, analyst comment and earnings details from fourth paragraph.)
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