Newmont exceeds profit expectations and plans to lead global gold production

Global miner Newmont reported on Thursday their fourth-quarter earnings which exceeded expectations and held an estimate on gold mining this year that could lead to stripping rival Barrick Gold of the title of world’s largest bullion producer.

Newmont, which has deposits in America, Africa, and Australia, said its fourth-quarter gold production increased 1.4 percent to 1.34 million ounces, matching Barrick’s performance, while prices rose by 6, 5 percent to $ 1,270 an ounce.

In the next two years, the Colorado-based company expects an annual production of 4.9 million and 5.4 million ounces of gold, and then an extraction volume of 4.6 million and 5.1 million ounces each year until 2022.

In contrast, Barrick Gold established its 2018 estimate at a production of 4.5 million and 5 million ounces, while it expects to extract between 4.2 million and 4.6 million per year between 2019 and 2022.

Newmont said lower production costs from younger fields, coupled with increases in productivity, helped generate an 88 percent increase in free cash flow year-round to 1.48 billion dollars.

“This performance gave us the means to invest in five new projects, raise our dividend by 87 percent and increase our investment in exploration, which was beneficial because it added 6.4 million ounces of gold to our reserve base,” said, Newmont CEO Gary Goldberg.

Newmont, which ended the quarter with $ 3.3 billion in liquidity, reported an adjusted profit of 40 cents per share, above analysts’ average estimate of 38 cents per share, according to Thomson Reuters.

The total sustained costs to produce an ounce of gold – a key indicator for the industry – increased by 5.4 percent to $ 968.

Earlier this week, Newmont revised its dividend policy with a quarterly payment of 14 cents per share, replacing a plan linked to the price of the gold price.

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