Newmont’s $2 Billion Writedown on Gold Decline

July 26, 2013 at 09:39

truthing

Newmont Mining Corp, the second-largest gold producer, reported a surprise loss after taking a $2.26 billion writedown on the value of stockpiles and two Australian mines following a slump in gold prices.

The second-quarter net loss was $2.1 billion, or $4.21 a share, compared with net income of $279 million, or 56 cents, a year earlier, the Greenwood Village, Colorado-based miner said today in a statement. The net loss, excluding the writedown, was 10 cents a share, compared with the 42 cent profit a share average of 17 estimates compiled.

Gold mining companies have announced at least $15 billion of writedowns in the past two months after the precious metal’s steepest quarterly drop in more than nine decades. Newcrest Mining Ltd said June 7 it may take a charge of as much as A$6 billion ($5.6 billion) and Goldcorp Inc, the biggest gold producer by market value, said yesterday it took a writedown on the value of assets of $1.96 billion.

The second-quarter results were released after the close of regular trading in New York, where Newmont rose 1.1 percent to $29.93 at the close.

Newmont said it was taking impairment charges on its Boddington and Tanami mines in Australia, and writing down the value of stockpiles and ore on leach pads.