Business Maverick: Newmont’s Gold Output Stagnates as It Chases Big Takeover

The Denver-based company expects to produce 5.7 million to 6.3 million ounces of gold this year, Newmont said Thursday while reporting fourth-quarter earnings that beat analysts’ expectations. That compares to last year’s production of 6 million ounces, and comes as the company seeks to add mines through a proposed $17 billion takeover of Australian rival Newcrest Mining Ltd.

The world’s biggest gold miners have struggled to boost production while facing higher input costs and harder-to-mine deposits, even with prices for the precious metal up about 37% in the last five years. Newmont itself faced mining woes that undercut production and delayed projects, including a stalled expansion of its Yanacocha mine in Peru.Newmont had cut its full-year guidance to 6 million ounces from 6.

Production in 2022 beat the average estimate of 5.9 million ounces by analysts surveyed by Bloomberg. The company has seen its output stagnate since acquiring Canada’s Goldcorp in 2019. Its highest annual output was in 2004, when it produced 6.73 million ounces following its 2003 takeover of Australia’s Normandy Mining Ltd.

Newmont didn’t provide any update to its takeover plans for Newcrest in Thursday’s earnings statement. Newcrest rejected the initial $17 billion proposal on Feb. 15, with its interim CEO saying the Australian company was “worth a lot more.”Newmont said its adjusted earnings in the fourth quarter were 44 cents a share, topping the 42 cent average estimate from analysts surveyed by Bloomberg.

The company’s 2023 capital expenditure guidance of $2.2 billion to $2.6 billion is also “a bit higher” than expected, Vital Knowledge founder Adam Crisafulli said in a note.

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