Newmont Mining’s Q1 2017 Earnings Preview: Higher Costs To Weigh On Profits

April 21st, 2017 by Trefis Team
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Newmont Mining will release its Q1 2017 earnings result on April 24 and conduct a conference call with analysts the next day. [1] While Newmont’s Q1 2017 earnings cannot be directly compared with the figure for Q1 2016 due to the divestment of the Batu Hijau mine late last year, we expect higher operating costs to negatively impact the company’s Q1 earnings.

Operations at Newmont’s Tanami mine, located in Australia, were disrupted by heavy rainfall towards the end of 2016 and in the early part of 2017. [2] In addition, operations at the Carlin mine were disrupted in November of last year, too, due to a failure at the Silverstar pit. [3] Costs incurred in the resumption of normal operations at these mines (which are reflected in the all-in sustaining cost metric forecast for 2017) will negatively impact the company’s Q1 earnings.

Newmont is likely to report higher realized prices for its gold mining operations in Q1 2017, as gold prices stood higher in the quarter as compared to the corresponding period of last year. Prices rose sharply in Q3 2016 as investors sought refuge in safe-haven assets such as gold in the wake of the unexpected outcome of the UK’s EU referendum. Though prices fell subsequently as the Federal Reserve raised interest rates in December 2016 and March 2017 amid improving U.S. economic conditions, they still averaged higher in Q1 2017 as compared to the corresponding period of last year. The following tables summarize our expectations from Newmont’s Q1 results.

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NEM Q1 2017 Earnings Preview

Have more questions about Newmont Mining? See the links below.

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 Announces First Quarter 2017 Earnings Call, Newmont Mining News Release [↩]
  2. Newmont Mining’s 2016 10-K, SEC [↩]
  3. Newmont Mining’s Q4 2016 Earnings Call Transcript, Seeking Alpha [↩]