Newmont earnings surge more than ninefold

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Newmont, the world’s largest gold miner, reported a more than ninefold rise in earnings in the first quarter thanks to higher gold prices and increased production from newly acquired mines. 

The Colorado-based company said net income had risen to $822m in the three months to March 31, from $87m in the same period a year earlier. 

The gold price is up 12 per cent since the start of the year as investors seek haven assets while the coronavirus crisis wreaks havoc in other markets.

But the earnings also reflect a rise in output because of Newmont’s $10bn acquisition last year of Canada’s Goldcorp.

Gold production in the quarter rose 20 per cent to 1.5m ounces. 

“Despite the disruption from Covid-19 we are well positioned to withstand this pandemic,” said Tom Palmer, Newmont chief executive.

The company said that while there had been no confirmed cases of coronavirus among its employees, it had significantly reduced the number of workers at its mines.

Newmont also reduced production at some operations “to reduce the risk of transmission to nearby communities with limited healthcare capacity”.

In March Newmont halted operations at four mines in Argentina, Canada and Peru because of the virus and last month said it was reducing production at its Peñasquito mine in Mexico.

But on Tuesday it said it was resuming output at three of the sites and that mines representing 90 per cent of its planned 2020 production remained in operation. 

Revenues in the quarter rose 43 per cent to $2.58bn. The company said the average realised price for its gold had risen by $291 an ounce from a year earlier to $1,591 a troy ounce. 

But the costs of production have also risen because of the acquisition, with the all-in sustaining cost of gold production up 14 per cent to $1,030 an ounce.

Shares in Newmont have risen 44 per cent this year to trade at $62.74 on the New York Stock Exchange. 

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