TORONTO - Newmont Mining Corp (NEM.N) reported a better-than-expected quarterly profit on Thursday and maintained a production prediction that would see it take the title of world's largest bullion producer from rival Barrick Gold (ABX.TO).
Newmont, which has mines in the Americas, Africa and Australia, said fourth-quarter gold output nudged 1.4 per cent higher to 1.34 million ounces, matching Barrick's performance, as prices rose 6.5 per cent to US$1,270 per ounce.
In the next two years, Colorado-based Newmont sees annual output between 4.9 million and 5.4 million ounces of gold, then between 4.6 million and 5.1 million ounces annually through 2022.
In contrast, Toronto-based Barrick cut its 2018 forecast to between 4.5 million and 5 million ounces of gold, while targeting 4.2 million to 4.6 million ounces of annual production from 2019 to 2022.
Newmont said low-cost production from newer mines, coupled with productivity gains, helped drive an 88 per cent gain in full-year free cash flow to $1.48 billion.
"This performance gave us the means to invest in five new projects, raise our dividend by 87 per cent, and increase our investment in exploration – an investment that paid off as we added 6.4 million ounces of gold to our reserve base, offsetting depletion for the first time in five years," said Chief Executive Gary Goldberg in a statement.
Newmont, which ended the quarter with US$3.3 billion cash on hand, reported adjusted profit of 40 cents per share, above analysts' average forecast of 38 cents a share, according to Thomson Reuters I/B/E/S.
The all-in sustaining costs to produce an ounce of gold — a key industry benchmark — rose 5.4 per cent to US$968.
The miner lifted its 2018 capital budget to US$1.2 billion to $1.3 billion from a December forecast of US$900 million to US$1 billion, citing a range of projects.
Earlier this week, Newmont revised its dividend policy with a quarterly payout of 14 cents per share, replacing its previous gold-price linked plan.
On Wednesday, the company reported gold reserves of 68.5 million ounces for 2017, unchanged from 2016, as it replaced reserves through exploration, projects, revisions and acquisitions. Gold resources were up 1 per cent, to 48.2 million ounces.
The company also said it plans to spend approximately US$230 million on exploration in 2018, earmarking some 39 per cent for North America, 20 per cent for Australia and the remainder for South America, Africa and other locations.
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