Newmont Mining Profit Falls Sharply

Newmont Mining Corp.'s profit fell sharply in the second quarter on lower metals prices, even as production and sales continued to increase.

Citing the effect of favorable oil prices and currency exchange rates as well as portfolio changes, such as its acquisition of AngloGold Ashanti Ltd.'s Cripple Creek & Victor mine, Newmont raised its production guidance.

The Greenwood Village, Colo., miner raised its guidance for gold production for the current year, as well as for what it expects to achieve by 2017. For 2015, Newmont expects gold production to reach between 4.7 million and 5.1 million ounces.

It projects copper production of 140,000 to 180,000 metric tons in 2015, up from 130,000 to 160,000 metric tons, and affirmed its previous guidance that output should then level out to between 115,000 and 135,000 metric tons in 2016 and 2017.

Shares, down 2% this year, edged down 0.76% to $18.38 in late trading.

For the period ended June 30, Newmont said the average realized gold and copper price fell to $1,179 a troy ounce and $2.41 a pound, respectively, compared with $1,283 an ounce and $3.01 a pound a year earlier.

Gold production, meanwhile, rose to 1.24 million ounces compared with 1.22 million ounces a year earlier, while copper production more than doubled to 41,000 metric tons from 24,000 metric tons a year earlier.

Gold and copper prices, meanwhile, set a five- and six-year low respectively on Wednesday.

Gold prices have been weighed down by the U.S. dollar's gains and higher expectations that the Federal Reserve could increase interest rates for the first time in more than nine years.

Meanwhile, copper futures for delivery in September, the benchmark price of copper in the U.S., settled Wednesday at $2.4280 a pound, the lowest price since July 2009.

Copper is typically seen as a barometer for the global economy because the metal is used widely across manufacturing and construction.

Most commodities are priced in U.S. dollars, making them more expensive for buyers abroad when the dollar gains value. Over the last 12 months, The Wall Street Journal's U.S. Dollar Index has risen 22%.

Overall, Newmont reported a profit of $72 million, or 14 cents a share, compared with $180 million, or 36 cents a share, a year earlier. Excluding certain items, profit rose to 26 cents a share from 20 cents a share a year earlier.

Sales rose 8% to $1.91 billion.

Analysts surveyed by Thomson Reuters expected a profit of 26 cents a share on $1.97 billion in sales.

Tatyana Shumsky contributed to this article.

Write to Maria Armental at [e-mail]

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