Newmont Shares Tumble as Production Falls Short of Expectations

Newmont Corporation (NEM), the world’s biggest gold mining company, missed profit expectations for the second quarter as lower production and sales volumes weighed on profitability, sending the company’s shares tumbling on Thursday.

Production Woes, Lower Gold Prices Hurt Profitability

Newmont’s gold production fell 17% to some 1.24 million ounces, after a labor strike ground production to a halt at the company’s Penasquito mine in Mexico. Meanwhile, the company temporarily shut its Eleonore mine in Quebec, Canada in response to wildfires, and reported below-average production at its Cerro Negro mine in Argentina and Akyem mine in Ghana.

The company’s revenues fell 12% from the year-ago quarter, dragged down by lower gold and silver prices. However, some of that was offset by gains from the sale of other metals such as copper and lead. Adjusted earnings per share (EPS) came in at 33 cents, down from 46 cents in the same quarter last year.

With production and revenue down, costs applicable to sales per gold ounce—a measure of operating expenses—increased in the second quarter, though it’s likely to recede in the back half of the year as production rebounds.

And the company expects that to happen, particularly once its almost $20 billion acquisition of Australian gold miner Newcrest Mining Ltd. finalizes later this year. The transaction, which was announced in May, is expected to close in the fourth quarter and is subject to shareholder approval.

Newmont shares fell about 7% on Thursday, posting their steepest one-day decline in almost a year. They’re down more than 8% so far this year, even though gold prices are up by a similar amount since the start of 2023.