Performance in 3Q17
In 3Q17, Newmont Mining (NEM) significantly outperformed its benchmark index. While the stock gained 15.8% in 3Q17, the VanEck Vectors Gold Miners ETF (GDX) rose 4.0%. The company reported an earnings beat in 2Q17 due to higher-than-expected production and lower-than-expected costs.
Newmont Mining also slightly increased its production forecast for 2017. It also improved its all-in sustaining costs (or AISC) guidance for 2017 from $950–$1,000 per ounce to $900–$950 per ounce.
Newmont Mining brought two projects online in 2016 below cost and on time. On August 31, 2017, the company announced that it had reached commercial production at its Tanami Expansion project.
This project is expected to increase the profitable gold production and support the ongoing exploration and development of Tanami’s prospective underground resource. This project was also completed by the company on time and within budget.
Newmont Mining is expected to complete the expansion at Northwest Exodus in 2018. It has already announced three more expansion projects in 2017:
- Twin Underground in Nevada
- Subika Underground in Ghana
- Ahafo Mill Expansion in Ghana
These projects would improve the profitability of the company and extend the respective mine lives. Newmont Mining could provide an update on these projects during its 3Q17 results, which would be interesting to watch.
In the next article, we’ll look at the key updates investors could anticipate in Barrick Gold’s (ABX) 3Q17 earnings.