Newmont Mining misses by $0.06, beats on revs; reaffirms gold production outlook, lowers FY17 capex guidance (37.44 +0.43)
- Reports Q4 (Dec) earnings of $0.25 per share, excluding non-recurring items, $0.06 worse than the Capital IQ Consensus of $0.31; revenues rose 23.2% year/year to $1.79 bln vs the $1.75 bln Capital IQ Consensus.
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Outlook:
- Investments to explore and develop promising expansions and to address previously announced geotechnical issues at Carlin and changes to cost allocation between gold and copper are expected to slightly increase the co's 2017 and 2018 gold cost outlook. Economic assumptions include $1,200 per ounce gold, $2.25 per pound copper, $55 per barrel WTI and $0.75 AUD-USD exchange rate.
- Gold: Attributable gold production outlook is in line with previously published five-year guidance and expected to increase to between 4.9 and 5.4 million ounces in 2017 as full year production at Merian and Long Canyon more than offsets declines at Twin Creeks and Yanacocha. Longer-term production of between 4.5 and 5.0 million ounces is expected with production from Long Canyon and Ahafo partly offsetting declines at maturing assets. Expansion projects at Ahafo, Yanacocha and Twin Creeks represent upside to both production and cost guidance.
- CAS is expected to be between $700 and $750 per ounce in 2017 and between $700 and $800 per ounce in 2018, before any portfolio improvements. Co expects longer term CAS to improve to $650 and $750 per oz. AISC is expected to be between $940 and $1,000 per ounce in 2017 and between $950 and $1,050 per ounce in 2018, excluding further cost and efficiency improvements expected through the Company's ongoing Full Potential program.
- Capex: Total capital is expected to be between $800 and $900 million in 2017, covering the remaining capital for Northwest Exodus and the Tanami Expansion Project. 2017 sustaining capital outlook of between $600 and $700 million represents a 24 percent reduction from previously published guidance due to cost savings and deferrals.
- Copper: Boddington and Phoenix are expected to produce between 40,000 and 60,000 tonnes of copper per year in line with previous guidance excluding Batu Hijau. In 2017, copper costs are expected to be between $1.45 and $1.65 per pound CAS and between $1.85 and $2.05 per pound AISC. Longer term, copper CAS is expected to average between $1.50 and $1.90 per pound and AISC is expected to average between $1.85 and $2.15 per pound, well below previous guidance due to a shift in allocation of costs between copper and gold.