Newmont slashes costs, mines 16% more gold

Shares in Newmont Mining (NYSE:NEM) rose in after hours trade following the release of its positive third quarter financial and operating results.

The Denver-based company, the world's number two gold mining company in terms of output, announced attributable gold production totalled 1.34 million ounces during the three months to end-September , up 16% from the prior year quarter. Year to date gold production is up 6% to 3.78 million ounces.

Production was boosted by higher output at its Batu Hijau, Tanami and Boddington mines, and the addition of the Cripple Creek & Victor mines it acquired earlier this year. Newmont has also been selling assets and including the impending sale of its Waihi mine in Australia generated some $1.7 billion in fair value asset sales since 2013 while keep output steady.

Improvements on the cost front was also impressive  with gold and copper all-in costs for the quarter at $835 per ounce and $1.54 per pound, compared with $995 per ounce and $6.61 per pound compared to a year ago.

Unit costs benefitted from ongoing cost and efficiency improvements, lower fuel prices and favourable Australian dollar exchange rates, and improved sales volumes, particularly at Batu Hijau in Indonesia and Boddington and Tanami in Australia according to the company. Newmont also recently approved the expansion of Tanami to up production to between 425,000 and 475,000 ounces per year for the first five years.

The $10 billion company said the outlook for the year has improved and it expects all-in costs of between $880 and $940 per ounce, and cash costs of of between $620 and $660 per ounce for the year as a whole. Attributable gold production is maintained at between 4.7 and 5.1 million ounces for 2015 while Newmont's share of copper production is estimated at 140–180,000 tonnes for the year, with more than 80% of the total coming from Batu Hijau.