Newmont Mining posts 4Q loss on project writedown

Newmont Mining Corp. posts 4Q loss on $1.6B writedown related to Canadian mining project

Associated Press

GREENWOOD VILLAGE, Colo. (AP) -- Newmont Mining Corp. has posted a fourth-quarter loss mainly because of a $1.6 billion writedown that the gold mining company's took on its Hope Bay project in Canada.

The Greenwood Village, Colo., company reported late Thursday that its net loss totaled $1.03 billion, or $2.02 per share, in the October-December quarter. That compared with net income of $812 million, or $1.61 per share, in the year-ago quarter.

Excluding the one-time charge, Newmont said it would have posted net income of $577 million.

Revenue rose to $2.77 billion from $2.55 billion.

Analysts surveyed by FactSet had forecast earnings of $1.24 per share on sales of $2.7 billion. Such estimates typically exclude one-time items.

Newmont said it took the writedown after placing the Hope Bay project on maintenance status after evaluating options to develop the property as well as its economic feasibility, compared with other pending projects.

Gold production attributable to Newmont shareholders totaled 1.3 million ounces in the final three months of the year, compared with1.4 million ounces in the year-ago quarter. Copper production fell to 47 million pounds from 74 million pounds.

Newmont recorded an average realized price in the most recent quarter of $1,670 per ounce for gold, up from $1,366 per ounce a year ago and an average price of $3.41 per pound for copper, down from $4.52 per pound a year ago.

For the year, Newmont reported net income of $366 million, or 73 cents per share, compared with $2.3 billion, or $4.55 per share a year ago. Revenue rose to $10.4 billion from $9.5 billion in 2010. Gold production fell 4 percent to 5.2 million ounces and copper production declined 37 percent to 206 million pounds.

Newmont recorded an average realized price in 2011 of $1,562 per ounce for gold, up from $1,222 per ounce a year ago and an average price of $3.54 per pound for copper, up from $3.43 cents per pound a year ago.

Looking ahead, Newmont predicted 2012 gold production of 5 million ounces to 5.2 million ounces and copper production of 150 million pounds to 170 million pounds.

Newmont shares fell $1.69, or 2.6 percent, to $62.11 in afternoon trading.

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