Newmont slides after taking $1.6 billion Arctic hit

Shares in Newmont Mining was down 2.7% in early afternoon trade on Friday after the company announced it is taking a $1.6 billion hit over its Hope Bay project in Canada.

The $30 billion company is still up 3.5% year to date.

Newmont is the second largest gold producer in the world and the writedown of the project located in Nunavut tipped it into an overall $1 billion loss in the fourth quarter.

Newmont put Hope Bay on care and maintenance at the beginning of February.

The Denver, US-based company said in its results announcement it will now concentrate on better prospects in Australia, Peru and Ghana.

Newmont’s plans are to expand gold production from 5.2 million ounces to 7 million ounces by 2017.

The company said yesterday capital expenditure in 2012 is expected to top $4 billion.

Newmont has also run into trouble with its $4.8 billion Conga project, near its producing mine Yanacocha.

Newmont stopped construction of the copper-gold project in November after violent protests in the poor Cajamarca region of northern Peru.