Newmont Goldcorp profit drops much more than expected on cost of deals, non-operating mines

Reuters | Updated: Jul 25, 2019, 17:49 IST

(Adds CEO comment, share price, details throughout)By Nichola SaminatherTORONTO, July 25 (Reuters) - Quarterly profit at Newmont Goldcorp fell significantly more than expected as the cost of deals and non-operating mines overwhelmed increases in sales, gold output and prices, the world's biggest gold miner said on Thursday.Net income attributable to shareholders from continuing operations sank to just $1 million, or zero cents a share, in the three months ended June 30, from $274 million, or 51 cents a share, a year earlier. Analysts had expected $188.58 million, or 23 cents a share, according to Refinitiv data.Newmont is in the process of integrating new operations after it finalized its acquisition of Goldcorp and its Nevada joint venture with Barrick Gold Corp in the second quarter."The Goldcorp integration process is well underway and on track to deliver an additional $365 million in annual cash flow," Chief Executive Gary Goldberg, who will be replaced by President Tom Palmer on Oct. 1, said in Newmont's earnings statement.Costs incurred while Newmont's Penasquito mine in Mexico and Musselwhite in Canada were not operational also contributed to the decline. Penasquito suspended operations for seven weeks due to a blockade by a trucking contractor and some community members, while a conveyor fire hit operations at Musselwhite.Shares fell 3.6% to $37.90 in premarket trading in New York.The Denver-based company posted revenue of $2.26 billion, compared with $1.66 billion a year ago and analyst estimates for $2.38 billion. Adjusted net income, excluding the deal costs, was $92 million, or 12 cents a share, down from $144 million, or 26 cents, a year ago.Newmont said it expects attributable gold production of 6.5 million ounces for 2019, at an all-in sustaining cost of $975 an ounce, reflecting operations at Newmont mines for the full year and Goldcorp assets from April 18.Second-quarter gold production rose 37% from a year earlier to 1.59 million ounces, while the average realized gold price rose by $25 to $1,317 per ounce.This month, Barrick Gold Corp said its Nevada joint venture with Newmont is expected to produce 1.8 million to 1.9 million ounces of gold in the second half of 2019.(Reporting By Nichola Saminather Editing by Chizu Nomiyama and Bernadette Baum)

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