Newmont Mining Corp. beat Wall Street estimates with a 38-per-cent increase in quarterly profit, driven by record gold prices, but again lowered the 2010 production target at its flagship Australian mine.
Third-quarter profit rose to $537-million, or $1.09 per share, from $388-million, or 79 cents per share, a year earlier, the world's No. 2 gold producer said Tuesday.
Sales rose to $2.6-billion from $2.0-billion as the price of gold has hit highs above $1,350 per ounce in recent months.
Analysts on average were expecting earnings of 95 cents per share and revenue of $2.37-billion, according to Thomson Reuters I/B/E/S.
The company's stock rose 1.5 per cent to $62.15 in light trading before the New York Stock Exchange opened.
Newmont, which operates mines in North and South America, Australia, Indonesia and Africa, narrowed its full-year gold production to a range of 5.3 million ounces to 5.4 million ounces from 5.3 million to 5.5 million.
The Denver-based company also increased its costs applicable to sales for the year to a range of $485 to $500 per ounce from $460 to $480.
Newmont had already lowered the full-year production target at the Boddington mine in Western Australia and Tuesday cut it again, to 700,000 to 750,000 ounces from 750,000 to 825,000 ounces. Boddington's costs applicable to sales were raised to $575 to $595 per ounce from $475 to $550.
Newmont cited unplanned mill maintenance at Boddington in July and August, but said higher grades of ore resulted in increased gold and copper production in September. But gold production decreased by 2 per cent, and copper was down 12 per cent from the second quarter at the Australian mine.
During the third quarter, Newmont's equity gold production totalled 1.4 million ounces, while copper production was 83 million pounds. Equity production represents the proportion of production owned by Newmont in joint operations with other mining companies.
With prices soaring, Newmont's average realized gold price in the quarter was $1,221 per ounce. It sold copper at an average of $3.67 per pound.
Chief executive officer Richard O'Brien said Newmont intended to take advantage of the substantial free cash flow generated by high metal prices to develop its next generation of mining projects, including Conga in Peru, Akyem in Ghana and Hope Bay in Canada, as well as a series of satellite deposits in Nevada.
He said about 40 per cent of the $1.3-billion to $1.5-billion in capital spending for this year has been earmarked for its development pipeline, "with increasing reinvestment expected over the next several years."