To All NEM Cheerleaders:
Here's a follow up on the surprise NEM earnings. Very encouraging. Now, if the GLD/NEM merger is approved in May, we shall be soaring soon, I trust!
Newmont Mining, Newmont Gold Nearly Double 1st-Quarter Earnings
NEW YORK -(Dow Jones)- Newmont Mining Co. and its 91%-owned subsidiary Newmont Gold Co. nearly doubled their first-quarter earnings, as both companies easily beat Wall Street's expectations.
Amid increased overall production and lower production costs, Newmont Mining posted a 90.7% surge in net income to $20.4 million, or 21 cents a share, compared with year-ago earnings of $10.7 million, or 11 cents a share. Analysts had predicted earnings of 14 cents a share for the latest quarter.
Earnings soared 91.5% at its Newmont Gold unit, as Gold's profit rose to $22.6 million, or 21 cents a share, compared with $11.8 million, or 11 cents a share the prior year. A consensus of analysts surveyed by First Call had a mean earnings estimate of 13 cents a share for Newmont Gold's latest quarter.
A company spokesman said that industry analysts surveyed by First Call had included results from the Minera Yanachocha project in Peru in making their first quarter projections.
Despite declines in gold prices, sales for the mining concerns rose 64.6%, to $266.1 million, from $161.7 million. Sales results included $79.1 million from the consolidation of results from Minera Yanachocha following an increase in the company's ownership in the project, for reporting purposes, to 51.35% in February.
Gold production rose 37%, to 621,800 equity ounces, from 452,700 equity ounces, the company said. Total cash costs, including royalty payments, fell to $192 per equity ounce, from $230. The companies said they realized $354 per ounce of gold sold, compared to $402 an ounce in the year-earlier period.
In February, the Peruvian Superior Court upheld Newmont's right to increase its ownership stake in Minera Yanacocha to 51.35%, from 38%. Newmont Mining said that, while opposing parties have appealed that decision to Peru's Supreme Court, the company has been advised by its Peruvian lawyer that modifications to the ruling can only be granted in limited circumstances and are unlikely.
Ronald C. Cambre, chairman, president and chief executive of both companies, said Newmont is on target to produce 2.6 million ounces of gold at a total cash cost of under $200 an ounce during 1997. He said that excludes the effects of the its planned $2.46 billion acquisition of Santa Fe Pacific Gold Corp., which is expected to close in the second quarter.
Does anyone want to submit a target price for NEM by the 1st of June?
Copyright (c) 1997 Dow Jones & Company, Inc.
All Rights Reserved.
Transmitted: 4/28/97 5:55 PM (L100Uspp) |
