Newmont up on Q1 results while Barrick blasts company's culture

newmont q1

Despite rocks being thrown by Barrick's chairman Peter Munk, Newmont Mining (NYSE:NEM) gained 2.71% today after filing its Q1 showing lower costs and anticipating higher production.

Net income at the world's second-largest gold producer was down, $117 million or 23 cents per basic share compared with $314 million or 63 cents per share in 2013. Newmont said the decline was due a fall in the average realized gold and copper prices of approximately 21 percent and 20 percent respectively.

But Newmont trumpeted reduced spending on exploration, advanced projects, and sustaining capital which led to $82 million in  all-in sustaining costs for gold this quarter.

In its outlook update the company saw production increasing in Africa from between 785,000 to 850,000 ounces to between 790,000 to 870,000.

Yesterday Munk told the Financial Post that  Newmont is not shareholder friendly and bureaucratic.

Barrick Gold (NYSE:ABX) and Newmont are trying to make a deal on merging. In a conference call announcing its Q1 resuts Newmont's CEO Gary Goldberg deferred on discussing the rumoured merger stating only that Newmont is "always open to opportunities."

Here are the company's highlights from its news release:

  • Generated cash from continuing operations of $183 million.
  • Generated cost savings of $82 million in gold all-in sustaining costs (“AISC”), which equates to $1,034 per ounce, down 8 percent from the prior year quarter.
  • Realized costs applicable to sales (“CAS”) of $751 per ounce of gold and $2.71 per pound of copper, a decrease of 1 percent and an increase of 19 percent, respectively, over first quarter last year.
  • Delivered 1.2 million ounces and 24 thousand tonnes of attributable gold and copper production, with higher gold production coming from our Australia/New Zealand and Africa operations.
  • Improved AISC outlook3 by 13 percent, and production outlook by 2 percent in Africa.
  • Declared a second quarter dividend of $0.025 per share in accordance with the Company’s gold price-linked dividend policy.