Peak Gold? Newmont Mining Gold Output Slips

April 27, 2012 at 08:37

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Newmont Mining Corp, the world’s second-largest gold producer, said its quarterly profit rose as gold prices outpaced higher labor and power costs at its mines.

First-quarter earnings were $561 million, or $1.13 per share, compared with $514 million, or $1.04 per share in the year-ago quarter.

Revenue rose to $2.68 billion.

During the quarter, spot gold gained 8 percent — from $1,563.80 per ounce to $1,688.29 on March 30. Copper climbed 11 percent, with benchmark May COMEX futures moving up from $3.44 per pound to $3.82.

In February, Newmont said it expected a rise in costs for gold and copper in 2012, mainly due to higher labor and power prices and estimated lower production at a mine in Indonesia.

The Denver-based company also operates mines in Ghana, Peru, Australia and Nevada.

The company said gold production in 2012 was expected to be about 5 million ounces to 5.2 million ounces and copper production 150 million pounds to 170 million pounds.

It said 2012 costs applicable to sales for gold are expected to be between $625 and $675 per ounce, and copper between $1.80 and $2.20 per pound. They were $591 per ounce and $1.26 per pound respectively in 2011.

Newmont said the outlook also reflected lower expected production at its Batu Hijau mine in Indonesia, where the company is processing lower grade stockpiles until late 2013.