Newmont Mining’s Q3 2016 Earnings Review: Higher Gold Prices Boost Results As Cost Reduction Remains In Focus

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Newmont Mining reported strong Q3 results, with elevated gold prices in the third quarter boosting the company’s earnings. The company’s average realized gold price stood nearly 20% higher in Q3, with heightened macroeconomic uncertainty in the wake of the UK’s June EU referendum boosting the investment demand for gold and prices of the metal. [1] However, Newmont Mining is well-prepared for an environment of lower gold prices, as well. The company remains on track to meet its all-in sustaining cost (AISC) guidance for the year, despite reporting a higher AISC figure in Q3, which would represent a 2% year-over-year decline. [1] The sale of high-cost mines and operational improvements will enable the company to lower its AISC. With gold prices having declined over the course of October in anticipation of a potential Fed interest rate hike in December, lower cost operations will stand the company in good stead going forward.

NEM Q3 2016 Earnings 1

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Newmont Mining

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Notes:
  1. Newmont Mining’s Q3 2016 Earnings Presentation, Newmont Mining Website [] []