Gold production and prices soar, Newmont Mining (NEM.US) surpasses Q4 profit expectations

On Thursday, Newmont Corporation (NEM.US), the world's largest gold producer, reported fourth-quarter earnings that surpassed expectations, driven by the continued rise in gold prices and the company's increased gold production.

The data showed that the adjusted earnings per share for the quarter ended December 31 were US$1.40, well above the average analyst estimate of US$1.08.

Gold prices have been on a steady climb in recent quarters, hitting new highs multiple times between October and December last year, driven by uncertainty surrounding the U.S. presidential election and tensions in the Middle East, which have increased demand for safe-haven assets.

Newmont's gold production in the fourth quarter grew 9.2% year-on-year to 1.9 million ounces, while the gold sales price rose 31.9% year-on-year to US$2,643 per ounce.

Moreover, the industry indicator, all-in sustaining costs (AISC), which reflects the total cost of producing gold, fell 1.5% year-on-year to US$1,463 per ounce, providing strong support for the company's profitability.

Looking ahead, Newmont expects its gold production for the year to be around 5.9 million ounces, higher than the 5.87 million ounces predicted by Wall Street analysts.

After completing its US$17.14 billion acquisition of Australia's Newcrest Corporation, Newmont announced in February 2024 that it would divest non-core assets and cut jobs to reduce its debt. As of December 31, the company's debt stood at US$5.31 billion.

At the end of last year, Newmont announced the sale of its Eleonore mine in Canada to British mining company Dhilmar Ltd for US$795 million, as well as the sale of its Musselwhite gold mine in Ontario to Orla Mining (ORLA.US) for US$850 million. Last month, Discovery Silver, a gold miner, said it would acquire Newmont's equity in the Porcupine Operations project in Ontario, Canada for US$425 million.