Newmont Mining Earnings Top Estimates as Gold Costs Fall

Newmont Mining Corp. (NEM), which is said to have held merger talks this month with Barrick Gold Corp., reported first-quarter earnings that beat analysts’ estimates as gold costs declined.

Net income fell to $100 million, or 20 cents a share, from $314 million, or 63 cents, a year earlier, Greenwood Village, Colorado-based Newmont said today in a statement. Earnings excluding one-time items were 22 cents a share, beating the 19-cent average of 17 estimates compiled by Bloomberg. Sales dropped 19 percent to $1.76 billion.

Newmont’s average cost was $751 an ounce, compared with $760 a year earlier.

Newmont, which has mines in the Americas, the Asia-Pacific region and Africa, is among producers seeking to bolster profit margins after gold prices in New York fell 28 percent last year, the biggest decline in 32 years.

Merger negotiations between the world’s two largest gold producers ended last week amid disagreements over which mines to include in a spinoff, two people with knowledge of the matter said April 19. Barrick (ABX) and Newmont are still interested in getting a deal done and have identified annual cost savings of $1 billion, mostly in Nevada, according to the people, who asked not to be identified discussing private information. Spokesmen for both companies have declined to comment on the talks.

Gold Output

The company’s gold production was 1.21 million ounces in the quarter, compared with 1.17 million a year earlier. Copper production was 24,000 tons, compared with 20,000 last year.

The company said it was unable to export about 2,000 ounces of gold and 2,500 tons of copper from Indonesia because of the country’s new export regulations.

Newmont is in talks with Indonesia about resuming shipments of copper concentrate from its Batu Hijau mine after the country introduced the restrictions in January. Newmont says it’s exempt from new duties under its contract with the government.

Gold averaged $1,292 an ounce in the quarter, 21 percent less than a year earlier.

Barrick, based in Toronto, is the world’s largest gold producer.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Steven Frank, Elizabeth Wollman

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